' Bankruptcy Liquidation of Assets - Law Offices of Robert M. Geller
CALL NOW!
FREE PHONE/VIRTUAL CONSULTATION

Is Your 401k or Other Retirement Savings at Risk in Bankruptcy’s Liquidation of Assets?

bankruptcy liquidation of assets If you’ve spent years saving for retirement, putting that money at risk when you file for bankruptcy is likely one of your greatest concerns. The bankruptcy liquidation of assets allows the bankruptcy trustee to take your assets and liquidate them to pay your creditors. But does this liquidation apply to your retirement savings?

The simplest answer to this question is “maybe.”

Bankruptcy laws allow you to exempt most retirement savings when you file for bankruptcy. However, exemption laws vary from state to state, and not all types of retirement savings are protected.

Here’s what you should know if you’re filing.

Where is Your Savings?

If you want to understand how bankruptcy affects your retirement statements, start with understanding the various types of savings.

For example, social security payments are safe in bankruptcy until they reach your bank account. Some states do not exempt bank accounts from bankruptcy, so while the court cannot take anything from your established social security benefits, nor can they intervene as the payments are transferred from the government to you, it might be able to take the money once it’s in your account.

One way to protect them? Put them into a separate account so they don’t mix with other income. Your bankruptcy attorney can help you figure out how to best protect your social security income based on your specific situation.

Bankruptcy Protects Pensions, 401k, and Other Savings from Liquidation

Pensions are another concern for people filing for bankruptcy.

If you’ve earned a pension from a private employer, the funds are protected under the Employment Retirement Income Security Act of 1974 (ERISA). Plans must meet specific guidelines.

Furthermore, pensions paid to employees of churches, non-profit organizations, and governments are not covered by ERISA. Speak to your attorney about using these protections and what you can do if you worked for an employer not covered by ERISA.

To learn more about ERISA protections, check out this information from the US Department of Labor.

Additionally, private retirement accounts like 401(k) accounts, and traditional and Roth IRAs are protected in part or full from the bankruptcy court. Bankruptcy laws protect all funds in a 401(k). People with IRAs receive protection up to a certain amount that increases regularly.

Finally, if you have tax-deferred retirement annuities, they are exempt. However, other types of annuities are not.

You and your attorney should review your retirement savings assets and determine the best way to protect the money you’ve earned.

Don’t Use Retirement Savings to Avoid Bankruptcy

Some people turn to their retirement savings to pay off debt and avoid filing for bankruptcy. This might seem like a good idea, but in the long run, it can cost you.

Bankruptcy laws protect retirement savings. Using this money that could remain in your possession to pay debts that qualify for discharge is a waste. Not to mention withdrawing retirement funds early triggers a tax penalty.

You could find yourself relieved of a few credit card or medical debts, but back at square one saving for your retirement and in debt to the IRS.

Before doing anything with your retirement savings, it’s important to speak to an experienced bankruptcy attorney. The bankruptcy liquidation of assets puts your assets at risk. It’s important to have the guidance of an expert. The two of you can review your specific situation and determine the best way to proceed.

To learn more or to discuss your situation with someone who understands bankruptcy laws, contact the Law Office of Robert M. Geller at 813-254-5696 to schedule a free consultation.

Archive

Video Testimonials

Tampa Bankruptcy Law Blog

Can Bankruptcy Help You Escape Overwhelming Medical Bills?

If you're drowning in medical debt, you're not alone. Medical bills are one of the top reasons people consider filing...
Read More

Bankruptcy Secrets Big Credit Card Companies Don’t Want You to Know

Dealing with credit card debt can feel overwhelming. Many struggle with high interest rates, minimum payments, and growing balances. When...
Read More

Life After Bankruptcy In Florida: A Guide to Moving Forward

Filing for bankruptcy is not the end. There is life after bankruptcy in Florida. Bankruptcy is a step toward a...
Read More

Your Fresh Start Begins Here: How Bankruptcy Wipes The Slate Clean

If you're drowning in debt, you're not alone. Millions of people face overwhelming financial stress every year. For many, bankruptcy...
Read More

The Hidden Cost of Ignoring Debt: Why Bankruptcy Could Save More Than Your Wallet

Debt can sneak up on you. One late payment turns into several. A missed credit card bill becomes a growing...
Read More

Is Filing for Bankruptcy a Sign of Failure?

Many people think bankruptcy means failure. That’s not true. Bankruptcy is a legal tool. It helps people regain control when...
Read More

Questions to Ask During Your Bankruptcy Consultation

Filing for bankruptcy is a big decision. It can wipe out debt and give you a fresh start. But you...
Read More

What Is Small Business Bankruptcy, and Do You Qualify?

Running a small business in Florida comes with financial risks. When debt becomes unmanageable, bankruptcy may be an option to...
Read More

Top 10 Bankruptcy Myths You Shouldn’t Believe

Filing for bankruptcy can feel overwhelming, especially with all the misinformation. Many people hesitate to explore their options because of...
Read More

Filing for Bankruptcy as a Sole Proprietor: What You Should Know

Running a business as a sole proprietor can be rewarding but comes with financial risks. If your company is struggling...
Read More

Bankruptcy

For The Next 5 Days GET A FREE BOOK About Bankruptcy

Learn More

Infographics

We are A Debt Relief Agency.
We help people file for bankruptcy under the Bankruptcy Code

Pay Online Bankruptcy Courses Newsletter Subscription

Call For A Free Initial Consultation

813.536.4468

Tampa Office

Law Offices of Robert M. Geller, P.A.
807 West Azeele Street
Tampa, FL 33606
T: (813) 328-6667
F: (813) 253-3405

Map And Directions

St. Petersburg Office

Law Offices of Robert M. Geller, P.A.
125 5th Street South
(Wells Fargo Financial Center)
2nd Floor, Suite G
St. Petersburg, FL 33701
T: (727) 274-9155

Map And Directions

Pasco Office

23526 State Road 54
Lutz, FL 33559
T: (813) 492-2663

Map And Directions