One of the things that most people who are thinking about filing for bankruptcy are concerned about is how bankruptcy will affect their retirement. You have worked long and hard to save up for your retirement and it would be unfortunate if you had to use your retirement funds to pay off the debts that you are trying to get rid of through bankruptcy. It makes sense for someone who is thinking about bankruptcy to be worried about whether or not they will lose their retirement accounts if they file for bankruptcy.
Most people who are in debt and have never filed for bankruptcy mistakenly believe that they have to give up all of their personal possessions in order to repay their deb. This is not true. Fortunately, most retirement accounts are not included in what you must lose in order to repay.
Keeping your money safely locked up in a bankruptcy exempt retirement account is the best way to ensure that your future is protected. Bankruptcy law offers special protections to most retirement savings and investments to ensure that individuals are able to provide for themselves financially in their old age. So long as your retirement funds are tied up in exempt retirement accounts, your creditors cannot touch a dime.
With that said, you should refrain from taking money out of your retirement accounts in advance of filing for bankruptcy because not only will you probably have to pay fees on the withdrawal, but you will also likely suffer negative tax consequences as a result. Furthermore, these funds would lose their special bankruptcy exempt status and would become available to your creditors as a source of funds for repaying your debts. Your retirement accounts are in a safe haven, and they will be there for you in your old age well after when your bankruptcy has concluded.
Retirement accounts are offered broad protection from creditors under the bankruptcy laws. These protections are specifically designed to keep your retirement savings safe for the future. If you are considering filing for Chapter 7 or Chapter 13 bankruptcy, you should consult with an experienced Michigan bankruptcy lawyer like the ones at the office of Karen E. Evangelista, PC. We can help guide you through the bankruptcy process and explain to you what assets you may have that could be exempt under the law. Do not worry about your retirement accounts being depleted by your creditors during bankruptcy. Please feel free to contact us today at 248-652-7990.