Many people worry about what is going to happen to specific assets if they have to file for bankruptcy. This is completely understandable since they worked hard to obtain and maintain the things they have. One thing that is especially troublesome for some is their retirement account.
The good news is that you won’t lose your IRA or 401(k) in the bankruptcy proceeding. These are considered exempt assets, which means they can’t be liquidated to be used to pay off your creditors. This is a positive point for people who know they need a secure retirement. It’s important not to liquidate the retirement accounts while you are trying to stay afloat. Talk to an attorney. It may be a better strategy to not touch the IRA or 401k before bankruptcy. You can then discharge your debts and still have the retirmement accounts available after filing.
It is important to note that you will have to include any money that you’ve taken out of these accounts prior to filing in your bankruptcy case. This might come up if you decided to try to use your retirement accounts to pay off some debt in an attempt to avoid having to file for bankruptcy, so think carefully before you make this decision.
There are many other factors to consider when you are going to file for bankruptcy. Learning how the laws will apply to your case can help you to have an understanding that will enable you to make a decision about what is best for you.
Not only do you need to think about what is going to happen to your assets, but you also need to consider how getting out of the crushing debt might improve your life and help you get started anew. Your future is worth the effort that you will put into ensuring that your finances get back on track.