How is my 401k affected by bankruptcy? 21 Answers as of July 04, 2013

I have a steady income and am debating which chapter would be best for me to file under. Having a large 401k account, under which one will I be able to keep my assets in?

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Mercado & Hartung, PLLC
Mercado & Hartung, PLLC | Christopher J. Mercado
Most likely yes, retirement accounts are exempt. Every state has different exemption amts. The federal statute 11 USC Sec 522(d)(12) also provides for this
Answer Applies to: Washington
Replied: 7/14/2011
Law Office of Peter White
Law Office of Peter White | Peter White
The Chapter under which you would be able to file will depend mainly on your income. The exemption laws you would be able to use will depend on your domicile (place of residence). If you are a Connecticut resident, you will be able to use either the state or federal exemption laws. There is no theoretical limit on the amount you can exempt for your 401(k) using the Federal exemptions; however, if the amount was really enormous, the Trustee could potentially dismiss your case for abuse. I have had clients with $100,000 in their retirement accounts who received a Chapter 7 discharge, to give you a ballpark figure.
Answer Applies to: Connecticut
Replied: 7/6/2011
Rosenberg & Press
Rosenberg & Press | Max L. Rosenberg
Generally 401ks are exempt from the liquidation of the bankruptcy estate by way 11 U.S.C. 522(d)(10)(E) or 522(d)(12). Under Connecticut law if you choose such exemptions you would be looking at Conn. Gen. Stat. Sec. 52-352b(m), 52-321(a). As an aside, this answer is another good reason why anyone considering bankruptcy should not file without an attorney. For you, depending on your income and your assets, it may be advisable to file a chapter 7 bankruptcy which is the shortest in time, the most beneficial in removing debt (full discharge, no payback generally) and offers the automatic stay of all legal proceedings. If however you do not qualify, due to your income or other reasons that you may not fit a Chapter 7 Means Test, you may consider filing a Chapter 13, which is a three to five year plan offering a payback or partial payback of your debts, starting with your secured debts. The former bankruptcy is generally used by people in foreclosure, attempting to save their house from strict foreclosure or foreclosure by sale. The 13 operates to stop the proceeding and offers a payback of the arrearage over the course of the plan. For further information, please contact our offices. Thanks for tuning in!
Answer Applies to: Connecticut
Replied: 7/6/2011
Bird & VanDyke, Inc.
Bird & VanDyke, Inc. | David VanDyke
Whether you file a ch 13 or 7 401 K Plans are generally exempt and cannot be touched by the court.
Answer Applies to: California
Replied: 7/6/2011
Janet A. Lawson Bankruptcy Attorney
Janet A. Lawson Bankruptcy Attorney | Janet Lawson
Your 401k is safe no matter which chapter you file.
Answer Applies to: California
Replied: 6/26/2013
    Ashman Law Office
    Ashman Law Office | Glen Edward Ashman
    Your post indicates that you may make the horrible mistake of contemplating bankruptcy without a lawyer. Do NOT make that mistake. You do NOT have a choice of Chapter 7 or 13. In most cases, the very numbers that qualify you for one disqualify you for the other (or make the other a bad idea). What happens to a 401K? That depends. If it is a qualified plan, and the lawyer properly schedules it and properly exempts it, it most cases you keep it. In some cases, with the right paperwork, you can even continue to fund it. If you file on your own and do not properly deal with it, you could lose it. It would be foolish to take that risk. Get a lawyer. Do it right. And you probably keep it.
    Answer Applies to: Georgia
    Replied: 7/5/2011
    Carballo Law Offices
    Carballo Law Offices | Tony E. Carballo
    You can keep your 401K assets in any bankruptcy case. There is a federal exemption that protects all 401k funds.
    Answer Applies to: California
    Replied: 7/5/2011
    The Law Office of Mark J. Markus
    The Law Office of Mark J. Markus | Mark Markus
    You can keep your 401k under any bankruptcy chapter. It is protected and not property of the bankruptcy estate. As for which chapter you should file, that can only be determined after consultation with a qualified bankruptcy attorney.
    Answer Applies to: California
    Replied: 7/5/2011
    Financial Relief Law Center
    Financial Relief Law Center | Mark Alonso
    In both a chapter 7 and chapter 13 bankruptcy you should be able to keep this asset as it is exempted and protected according to the bankruptcy code.
    Answer Applies to: California
    Replied: 7/5/2011
    Colorado Legal Solutions
    Colorado Legal Solutions | Stephen Harkess
    As long as you leave the money in your qualified retirement account (401(k)) it is protected from creditors and will not affect your bankruptcy.
    Answer Applies to: Colorado
    Replied: 7/5/2011
    Law Offices of Joseph A. Mannis
    Law Offices of Joseph A. Mannis | Todd Mannis
    Your 401K is exempt regardless.
    Answer Applies to: California
    Replied: 7/5/2011
    Ursula G. Barrios Law
    Ursula G. Barrios Law | Guillermo Machado
    401K that are ERISA qualified are not affected by BK filing.
    Answer Applies to: California
    Replied: 7/5/2011
    Law Office of Harry L Styron
    Law Office of Harry L Styron | Harry L Styron
    Whether you will be required to file under Chapter 13 or may file under Chapter 7 depends on your income and the number of people in your family. In either case a 401K plan is exempt except for claims for child and spousal support.
    Answer Applies to: California
    Replied: 7/5/2011
    Symmes Law Group, PLLC
    Symmes Law Group, PLLC | Richard James Symmes
    When you file bankruptcy, your 401K will be fully protected.
    Answer Applies to: Washington
    Replied: 7/5/2011
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