Posted: March 24, 2020
Usually you can protect your retirement account (IRA and 401k) when filing for chapter 7 bankruptcy. When you file for chapter 7 bankruptcy, a trustee is assigned to your case, who acts as a fiduciary to the creditors of your estate. All of your property at the time of your filing becomes part of your bankruptcy estate and may be administered for the benefit of your creditors. However, debtors are entitled to claim certain exemptions depending on what State they live in. Typically retirement accounts fall into the category of exempt property, which means that the trustee cannot take or try to sell the asset in order to make a distribution to your creditors. However, if you decide to make a withdrawal from your retirement account before you file bankruptcy, those funds are no longer protected.
Our team at Kirschenbaum & Kirschenbaum has over 40 years of bankruptcy experience. We are here to offer guidance and assistance and answer all of your bankruptcy questions.
For assistance with all Bankruptcy matters, please contact us:
Ken Kirschenbaum, Esq. (516)-747-6700 Ext. 301 or ken@kirschenbaumesq.com
Stacy Spector, Esq. (516)-747-6700 Ext. 304 or sspector@kirschenbaumesq.com