Filing a Chapter 7 or Chapter 13 bankruptcy case allows you to seek refuge from your creditors while comprehensively dealing with your debt, but most individuals are concerned about what will happen to their assets. Fortunately, the law provides protection by providing certain exemptions that remove specific pieces of property from being administered in your bankruptcy case.
One of the most significant exemptions you can claim is one that protects the funds in your retirement account. Obviously, this is crucial for many people since their retirement account is one of their most important assets they own. There are federal exemptions and most state exemptions that apply to 401K accounts, pensions, profit sharing and Individuals Retirement Accounts (IRAs).
It is important to note that there is a cap on the amount of exempt funds held in IRAs which is currently $1,245,475 per person. For most people, their accounts are well below this cap and fully protected. If your IRA account should exceed the amount of the cap, it is important to discuss it with your bankruptcy attorney.
In fact, if you are considering filing a Chapter 7 or Chapter 13 case, it is essential to discuss the impact of the filing on all of your retirement accounts. This is especially true if you have taken a loan against your 401K. This may add some complexity to your case, which requires the knowledgeable assistance of your lawyer.
Properly claiming exemptions to protect your property is vital to having a successful bankruptcy case. Thus, when you meet with your bankruptcy lawyer at your initial consultation, it is important to provide documentation regarding all of your retirement accounts to ensure those funds are protected.
At DeLadurantey Law Office, LLC, we help businesses and families find their way out of highly difficult financial situations. We provide the advice and guidance you need in obtaining debt relief through bankruptcy and debt negotiations. We can also assist you in defending a foreclosure action. Contact us at 414-377-0518 to discuss how our Milwaukee bankruptcy attorneys can assist you.