One of the first questions my clients ask me when they are considering filing a chapter 7 bankruptcy is will they lose their retirement accounts. In nearly all cases 401 (k) accounts , IRAs , Annuities, 403(b) and other tax deferred accounts are exempt. This means you will be able to keep them.
Other accounts that are exempt are:
- cash value of life insurance policy,
- Florida Prepaid College Trust Fund
- Workers Compensation Benefits
- Police Retirement Benefits
- Teachers Retirement Benefits
- State and County Retirement Benefits
- VA Benefits
- Professional prescribed health aids up to $1000.00
I have seen so many clients over the 29 years that I have practiced bankruptcy law drain their retirement accounts to pay their credit card bills and medical bills and they still had to file a bankruptcy in the end. If only they had consulted a bankruptcy lawyer before going through their life savings.