There have been a number of articles recently discussing the increasing number of older Americans that are filing for bankruptcy in the U.S. While bankruptcy can be scary at any age, it can be much more difficult for older Americans who fear losing their retirement savings in the process. Tennessee readers considering bankruptcy might find the following blog on retirement savings and bankruptcy exemptions interesting.
Bankruptcy exemptions play a very important role in Chapter 13 and Chapter 7 bankruptcy filings. For readers who are not familiar with bankruptcy exemptions, a bankruptcy exemption is an exemption in the bankruptcy law that allows the individual filing to keep certain property. There are separate exemptions for Chapter 7 and Chapter 13 bankruptcy, and there are also state exemptions and federal exemptions.
The particular exemptions allowed under Chapter 7 and Chapter 13 depends on how a person files and it is also vital that filers discuss the various state and federal exemptions available to them in order to maximize the benefit. In some cases, an experienced bankruptcy attorney will be able to file a bankruptcy petition that will wipe out all of the filer's debt while keeping every cent in the person's retirement savings account.
Ensuring that assets are protected before filing for bankruptcy is essential. There are a number of things that will need to be discussed with a debt relief professional. First, the account must be a qualified account protected by the particular exemptions. It is also important to ensure the funds remain in the account. Because of the serious consequences of doing it wrong it is worth consulting with a professional to ensure that everything is completed correctly.
Source: Fox Business, "Will my 401(k) be safe if I File for Bankruptcy?" Justin Harelik, June 19, 2013
