When you make the decision to file for bankruptcy, you are probably wondering whether all of your belongings will be sold, and if you will be able to keep the funds you’ve earned and added to your retirement accounts.
Fortunately, when you are pursuing a Chapter 7 or Chapter 13 bankruptcy declaration, you’ll be able to keep the money you’ve put into your retirement plan and pension. However, there are certain exemptions and limitations that you’ll need to be aware of. Continue reading to learn more about bankruptcy exemptions and the limitations that can apply to your case.
Bankruptcy Exemptions and Your Retirement Accounts
Even if you are pursuing a Chapter 7 bankruptcy declaration, you don’t have to forfeit everything you own. In fact, the only items that would be up for grabs is your assets.
Bankruptcy exemptions are what allow you to retain possession of your home, your vehicle, the items in your home, and your retirement savings. When you have an ERISA-qualified retirement account or pension plan, you won’t have to worry about them being counted as part of your assets. As previously state, however, there are limitations.
Limitations You Need to Be Aware Of
If you are currently receiving monthly retirement benefits, these funds will be counted as part of your monthly income. This means that any disposable income you have after paying your necessary monthly expenses will need to be used to repay your creditors.
If you have an IRA, the most that you can have in your account at any time is $1,283,025 million as of 2018. Any amount that exceeds this amount can be taken by the bankruptcy courts as a way to repay your debts. This amount changes annually, so it’s important that you reach out to your lawyer to determine how much the amount is when you read this article.
Get Help from an Indiana Bankruptcy Lawyer
After working your whole life to set money aside for your retirement, the last thing you need is to lose everything you’ve put away into your retirement accounts. In most cases, fortunately, your retirement savings will be exempt from your bankruptcy case.
If you have further questions about retirement accounts or your bankruptcy case as a whole, get in touch with your Indiana bankruptcy lawyer at Rowdy G. Williams Law Firm today. You can call our office at 1-812-232-7400 or fill out the brief contact form located at the bottom of this page to schedule your free case evaluation.