One of the many questions that the clients of our bankruptcy law lawyer in Orange County ask is the safety of their retirement assets. Are they safe in bankruptcy?
The good thing is that your retirement assets are protected from your creditors when you file for bankruptcy.
Most of us would likely to eliminate retirement contributions when our money is tight. People do this to help them in paying their credit card debts.
But this method of repaying your debt will only make sense in the short run. The IRA will not call you as soon as you stop funding your 401(k).
Reducing your retirement contributions will make you regret it when you need it. When you retire, paying your debt will be more difficult. Thus, it is better to pay it ahead of time so you can stretch your savings.
When you file for bankruptcy, creditors cannot take money from your retirement account. The reason for this is that the federal and state laws favor your retirement funds over your creditors.
Your qualified retirement funds are safe in a chapter 7 bankruptcy and Chapter 13 bankruptcy. When you talk to our bankruptcy law lawyer in Orange County, you must disclose all your financial accounts. In that way, he can tell you which of those accounts can be exempted.
While you are in chapter 7 or 13 bankruptcy, you can still continue making retirement contributions. Federal law will give you credit for making retirement contributions in chapter 13.
When you reduce the amount you pay for your chapter 13 plan payment and your retirement funding, you can qualify for a chapter 7.
Collection of Your Debt Continue After You Die
After you passed away, your creditors will still collect your debts. The only time your assets can be distributed to your loved ones is when your estate is settled. It is applicable even if you have a few assets.
But if you filed bankruptcy and paid your debts, the creditors are barred from collecting your assets in the future. Your assets will be transferred to your family members and friends. The executor you have chosen will have an easier time performing the job. He/she does not have to deal with your debt collectors.
If you cannot pay your debt, it is ideal that you take advantage of filing bankruptcy sooner rather than later. Talk to our bankruptcy lawyer to know more about the pros and cons of filing.
Some people would hesitate to file because they listened to other individuals who are not experienced in this field. Before you decide not to file bankruptcy, make sure that you have consulted with an attorney.
At Karine Karadjian law office, our experienced bankruptcy attorneys will give you free consultations. Our caring staff will help in handling your case. You may visit our law office in Orange County or Los Angeles County.
Never file for bankruptcy without first consulting with an attorney. Talk to our bankruptcy law lawyer in Orange County today to know more about how you can protect your retirement assets. Call us at (818) 918-9660