Will Qualified Retirement Plans Be a Part of Your Bankruptcy Estate?
You’ve been struggling to meet your financial obligations, whether as a result of an unexpected injury or illness, the loss of your job, a divorce or other personal challenge. Over the years, you’ve worked hard to plan and prepare for your retirement, regularly making contributions to a qualified plan. Will your creditors have access to those funds? Will you have to start all over to prepare for a comfortable retirement?
Can Your Creditors Seek Reimbursement from Funds You Have in a Qualified Retirement Plan?
No. Creditors may not obtain access to any qualified plan to obtain repayment of a debt in bankruptcy. Qualified plans include any employer-sponsored retirement plans that meet the requirements of the Internal Revenue Code for deferment of income tax (until after retirement). Qualified plans include defined contribution plans and defined benefit plans. Examples of employer-sponsored retirement plans that will be exempt from bankruptcy include 401k plans, 403b plans, and most pension plans.
A personal retirement account will also be deemed a qualified plan if it qualifies for tax deferment. Because an IRA is a qualified plan, the funds in that account will not be available to creditors in a bankruptcy filing.
What If My Retirement Funds Are Not in a Qualified Retirement Plan?
Investments or savings that are not in a tax-deferred qualified plan may or may not become part of your bankruptcy estate, based mostly on the provisions of state laws. Often, the analysis must be made on an asset-by-asset basis. An experienced Texas bankruptcy attorney can help you determine your rights.
Contact an Experienced Rockwall, TX Bankruptcy Attorney
At the Law Offices of Carrie Weir, all potential clients are entitled to a free initial consultation. To arrange an appointment to discuss your rights and options an in bankruptcy, contact my office online or call 972-772-3083. I handle Texas personal bankruptcy filings in Kaufman County, Rockwall County, Collin County, Dallas County, Hunt County and the surrounding counties.
