Your Retirement And Bankruptcy

You have been under debt and now you are planning to file a bankruptcy; but there

is a very important asset that you dont want to loose any way: your retirement account. Are retirement accounts protected from Bankruptcy creditors?

ERISA and how it can protect your retirement accounts?

ERISA means Employment Retirement Security Act of 1974. This act was intended to protect employee pensions from risk investments of the employers and pension administrators. However, with time, more employers went form defined benefit pension plans to the more familiar 401 (k), where employee contributions are matched. ERISA effects those as well. If you have 401(k) plan through your employer, it is an ERISA qualified plan and it cant be taken by anyone, including your bankruptcy Trustee as well, to pay your creditors.

IRAs

Individual retirement accounts are another form of common accounts that is used to fund retirements of the individuals. If your retirement is ERISA qualified, it cant be seized by bankruptcy. The problem is that most of the IRAs are not qualified to ERISA. How can this be determined? If your employer doesnt contribute to IRA, it means that it is not ERISA qualified. That means all IRAs that you have funded yourself with your money are likely to be included in the assets collected by bankruptcy attorney and divided among the creditors. If you have deferred compensation plan, that can become tricky as well. There is every possible chance that it will be included in your bankruptcy proceedings as well.

How about getting a bit clever?

Assume you have a 401(k) and decide to make large contributions to it to keep those funds secure from bankruptcy proceedings. Certainly, that not a good idea! Under such circumstances, bankruptcy courts can order your bankruptcy trustee to use your 401(k) assets to pay your creditors as you have been playing fast and loose with the rules.

If you are considering filing a bankruptcy make sure you have an experienced and qualified bankruptcy lawyer in Houston, who can advice you and let you know all the benefits and drawbacks of this action. Also make sure your bankruptcy attorney knows all about your retirement accounts and if they are ERISA qualified. You can confirm this from your employer.

A bankruptcy attorney has a very critical role to play in your bankruptcy proceedings and also protecting your assets. You are to make sure your attorney knows the entire details about your assets and you are not hiding anything from him.

If you need some help with finding the bankruptcy attorney, you can simply refer to bankruptcy legal help. This is an online source where you can locate all the help related to bankruptcy issues and find qualified bankruptcy lawyers.

by: Harvard McIntosh

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