Bankruptcy and Retirement Assets

Can Your Retirement Assets Be Available to Creditors in a Bankruptcy Proceeding?


It’s no secret that medical expenses are one of the primary causes of personal bankruptcy filings in the United States. Unfortunately, as you age, your risk of health problems and substantial medical bills increases significantly. You may be edging in on retirement, incurring substantial financial debt, but afraid to seek protection under the bankruptcy laws for fear that you’ll lose your retirement. There’s good news!

Under federal law, most pension and retirement assets cannot be used to satisfy creditors in a bankruptcy proceeding. If you file for protection under Chapter 7, you won’t have to liquidate your pension. If you file for Chapter 13 reorganization, your pension assets won’t count when the court determines how much you can pay your creditors.

As a general rule, all types of retirement and pension funds are protected, including IRAs, 401(k)s, 403(b)s, profit sharing, defined benefit, money purchase and Keogh plans. There’s only one exception—you can only protect up to $1,245,475 in all your IRA investments.

Distributions from a Qualified Retirement Plan

The exemption on access to retirement assets applies only to funds in a retirement account. The bankruptcy court and the trustee will never be allowed to make you pull assets out of a retirement plan to pay a creditor. However, if you start pulling funds out of a retirement plan, that will be considered income and can be accessible by your creditors.

Contact Heath, TX Bankruptcy Attorney Carrie Weir

At the Law Office of Carrie L. Weir, I provide a free initial consultation to anyone with questions or concerns regarding a personal bankruptcy filing. Contact my office by e-mail or call me at 972-772-3083 to schedule a private consultation. With offices in Rockwall, Texas, I represent clients in Heath, Greenville, Lavon, Wylie, Mesquite and Rowlett.

Speak Your Mind


Call Rockwall bankruptcy lawyer Carrie Weir at 972-772-3083 or fill out the contact from below for a free, confidential consultation to discuss your options.

How Can I Help

Complete the contact form
and I will email you.

  • This field is for validation purposes and should be left unchanged.

Consumer Bankruptcy

Can I keep my car? Will bankruptcy stop a foreclosure? Will I ever be debt-free again? How will I ever pay these medical bills?

Read More

Chapter 7 Bankruptcy

If you want to stop creditor harassment, eliminate repossession debt, stop garnishments and keep your house, and car, a Chapter 7 bankruptcy could help.

Read More

Chapter 13 Bankruptcy

Are you in jeopardy of losing your house? Are you making good money but everyone is asking for payment right now? Do you want or need to stop collections?

Read More