For older Americans in debt, the thought of filing bankruptcy and losing their retirement accounts is terrifying. These people have worked their entire lives saving to enjoy their golden years and worry that an unexpected illness or job loss may derail years of planning. Fortunately, retirement accounts are generally exempt from bankruptcy. Therefore if you have serious debt problems and are close to retirement, speak to a bankruptcy lawyer who can explain your options.
For example, many people have 401(k)s that they hope to use for retirement. These are popular because employer’s can fund them without being on the hook permanently as they would with a pension. Workers like them because it gives them flexibility on how they choose to invest. IRAs are similar in that they offer flexibility, along with a tax benefit, for those who choose to use them for retirement.
Both of these types of investments are safe from bankruptcy. There are some exceptions to this rule (such as an IRA with an extreme amount of money), but in general most are safe from liquidation. A bankruptcy attorney can examine your particular situation and answer any questions you may have about 401(k)s and IRAs in bankruptcy.
Some people still get pensions from their employers which give them an annual amount for the rest of their lives. Assuming your pension is an ERISA plan, it, too, is exempt from bankruptcy. This is a great help for those on a fixed income who may suddenly have extreme debt. This allows an older couple to live independently while discharging debt in Chapter 7.
If you are getting close to retirement or are currently retired and have debt problems, Westbrook Law Group can help. We understand the stress and anxiety that debt can bring and we work to ease these problems. We will find the best solution for you and your family, allowing you to enjoy your golden years without constant harassment from creditors. For a free consultation with a bankruptcy lawyer, contact Westbrook Law Group today.