Alpharetta: What About My Retirement Accounts in Bankruptcy?

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Question: I live in Alpharetta and need to file a chapter 7 because I have gotten into too much debt. My business failed and my wife lost her job. We used credit cards all of the time and I took out personal loans that I can't afford. I was buying everything on credit when I ran out of cash. I even put business expenses on my personal credit card because I couldn't get a business loan from a bank.

After I got into a fight with my neighbor in my subdivision and broke my arm I had to go to the hospital. Now the hospital is suing me for the emergency room visit. I have all sorts of doctor bills, from the radiologist to the orthopedist.

I need to know if I can keep my retirement accounts. Do they count the money in my retirement accounts for the purposes of bankruptcy? Am I not going to be able to file a chapter 7 bankruptcy because I have over $100,000 in retirement accounts? I have an IRA and a 401 (k).

Answer: Retirement accounts will not factor into the chapter 7. We have seen clients with very large sums of money in retirement accounts that were able to file a chapter 7 bankruptcy. Employer-sponsored plans like 401(k)'s and 403(b)'s have long been excluded from an individual's bankruptcy estate.

IRA's are protected from bankruptcy as well, due to the provisions of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCA). IRA holders facing bankruptcy can shield their IRA assets from creditors.

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