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Bankruptcy Blog

Protected From Creditors: Qualified Retirement Funds

by on 6/12/2014

I have appeared on many radio shows and have met with thousands of clients over the past few years, and one of the most gut-wrenching things I have heard is someone dipping into their retirement in an effort to avoid bankruptcy. But guess what? It didn’t help. They still had to file for bankruptcy and cost themselves much-needed retirement funds.

Bankruptcy Can Protect Your Retirement Savings

There are two certainties when considering bankruptcy and retirement funds:

  1. Qualified retirement funds are always protected from creditors.
  2. It's in your best interest to hold on to retirement funds.

11 USC 541 defines what is considered property of the estate in bankruptcy and section (b) lists a few specific items that are not. One of those items is qualified retirement funds. This means that no matter what state law you use to protect your assets, your qualified retirement funds will always protected. So don’t give them to a creditor without first talking to a knowledgeable bankruptcy attorney, because you could risk damaging your financial future otherwise.

What Else Is Protected By Bankruptcy?

Are you looking for more on other protected assets or further details about bankruptcy as a debt relief option? See if your questions are answered in our bankruptcy FAQ. If you'd rather get in touch with an experienced bankruptcy attorney, please contact us today!