CALL NOW!
FREE PHONE/VIRTUAL CONSULTATION

Should I Use Retirement Savings to Avoid Bankruptcy? A Tampa Bankruptcy Lawyer Can Help You Protect Your Retirement Nest Egg

Retirement Tampa Bankruptcy Lawyer.Withdrawing money from your retirement savings is rarely advised by financial experts, even if you are facing bankruptcy. Working with a Tampa bankruptcy lawyer when you file ensures you utilize the appropriate exemptions. This protects your retirement savings from the bankruptcy court.

The average person works hard for their retirement savings. The last thing they want to do is put that savings at risk. But what happens if they face financial struggles and must take drastic measures? Does filing for bankruptcy put your retirement savings at risk?

In general, bankruptcy does not pose a risk to your retirement savings. However, many people considering bankruptcy or trying to avoid filing end up putting their nest egg at risk. Instead of moving forward with bankruptcy, they withdraw money from their retirement savings to take care of pressing debts.

Unfortunately, this is one of the worst things you can do. Chances are it won’t resolve all of your financial challenges. And you’ll be worse off by having taken this approach because you not only have financial problems now, you’ve vastly increased the odds you’ll have financial problems in the future, too.

Bankruptcy Protects Retirement Savings

For most people, the better option is to move forward with bankruptcy to deal with their immediate financial concerns. Bankruptcy wipes out a significant amount of debt without forcing you to liquidate retirement savings. Things might be tight for a few years as you rebuild after bankruptcy, but long-term, your financial plans stay on track.

Additionally, liquidating your retirement savings can cost you big. Not only will you be putting the money toward potentially dischargeable debts, but you could also face significant penalties and tax consequences. You might clear up a few credit card debts, but you’ll get hit with fees and penalties for cashing out early.

How Do You Know a Retirement Account is Protected from the Bankruptcy Court?

Protection is available for most but not all retirement savings accounts.

To receive protection, an account must qualify under the Employee Retirement Income Security Act (ERISA). These types of accounts do not become part of a bankruptcy estate. You don’t need to use any bankruptcy exemptions to protect them. This means they don’t’ count toward any exemption limits, so don’t worry if you have a sizeable amount saved for retirement. It won’t eat into your overall exemption limit, as long as it’s in an ERISA account.

What’s important to note is that you must have the money you’ve saved invested into a qualifying account. Putting money into a regular savings account or simply socking it away in your home and calling it retirement savings doesn’t guarantee protection.

However, even if a savings account is not ERISA-qualified or is otherwise the property of the estate, it’s likely still protected when you file for bankruptcy through federal and state exemptions. Most retirement accounts are exempt from taxation under the IRS code. Traditional and Roth IRAs are exempt up to a certain amount.

Speak to a Tampa Bankruptcy Lawyer for More Information

The best thing you can do is speak to a Tampa bankruptcy lawyer about your retirement savings. They’ll help you determine what qualifies as protected.

If you have questions about protecting your retirement savings when filing for bankruptcy or you want to make sure everything goes as planned with your bankruptcy, we can help. Contact the Law Office of Robert M. Geller at 813-254-5696 to schedule a consultation to discuss your case.

Archive

Video Testimonials

Tampa Bankruptcy Law Blog

Should Seniors File Bankruptcy? Here’s 3 Things You Need to Know

Should seniors file for bankruptcy? Maybe. It all depends on their specific financial circumstances. Bankruptcy can be a great solution...
Read More

What Happens If My Spouse Dies During Bankruptcy?

Seniors declaring bankruptcy have many concerns. One of the most pressing is how their health or their spouse’s health might...
Read More

Can I File for Bankruptcy Without a Job?

Bankruptcy is often considered a tool used by people without money, without income, and without any financial hope. The truth...
Read More

Should I Use Retirement Savings to Avoid Bankruptcy? A Tampa Bankruptcy Lawyer Can Help You Protect Your Retirement Nest Egg

Withdrawing money from your retirement savings is rarely advised by financial experts, even if you are facing bankruptcy. Working with...
Read More

Can You File for Bankruptcy and Keep Your Home

Foreclosure is something that occurs after a homeowner has missed multiple mortgage payments. Working with a Florida bankruptcy attorney helps...
Read More

Is There Such a Thing as Mortgage Bankruptcy?

Your home is one of your primary concerns when filing for bankruptcy. Can you claim bankruptcy and keep your home?...
Read More

What Do You Need to Know about a Home Auction in Bankruptcy?

Home auctions are a common topic that arises when someone is faced with the prospect of bankruptcy. Bankruptcy protection for...
Read More

Can a Florida Bankruptcy Attorney Help Me Avoid Eviction

Losing one’s home is one of the most common concerns you can have when filing for bankruptcy. A Florida bankruptcy...
Read More

Covid-19 Tax Tips

The COVID-19 pandemic has affected a variety of things including taxes. These COVID tax tips can help you prepare and...
Read More

How Can a Bankruptcy Attorney in Tampa Florida Help Me If I Fall Behind on My Mortgage After Filing for Bankruptcy?

Many people find that filing for bankruptcy provides all of the financial relief they need to get back on track....
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

NACBA Logo avvo1 avvo2 avvo3 LEA BBB Logo

Call For A Free Initial Consultation

813.254.5696

Tampa Office

Law Offices of Robert M. Geller, P.A.
807 West Azeele Street
Tampa, FL 33606
T: (813) 254-5696
T: (800) 853-7549
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) 532-3939

Map And Directions

Pasco Office

23526 State Road 54
Lutz, FL 33559
T: (813) 336-2320

Map And Directions