Want To Know If Your 401(K) Plan protected in Bankruptcy?

Posted by on Feb 10, 2012 in Chapter 7 Bankruptcy Issues | 0 comments

When one files bankruptcy, oftentimes the person has an interest in retirement accounts including 401(K) plans.   Such plans are generally ERISA qualified (check  your plan summary), and therefore such plans are generally excluded from Property of the Estate in bankuptcy cases under 541(b)(7) of the bankruptcy code.

However, not all retirment plans are the same – 401(K)’s and retirement annuties are not one and the same.  Pensions are not the same.   When filing bankruptcy, it is critical to consult a reputable bankruptcy attorney if one has retirement plans and other interests in annuities and/or pensions.  Oftentimes, even unseasonsed bankruptcy attorneys get it wrong or fail to realize a client’s retirment account might not be protected in bankruptcy.  In order to know your rights, you must consult with a competent bankruptcy attorney who can explain to you exactly how your interests in such accounts are protected BEFORE you file your bankruptcy case.   It is often too late once you file to go back in time and undo the mistake.

 

 

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