Your debt load has spiraled out of control, and you’re considering filing for bankruptcy to get rid of it. Yet you hesitate because you have retirement accounts and you don’t want to give them up. In fact, you’re considering breaking into them and taking the penalty in order to make your debts go away. Don’t sell out your retirement for debts that you can legally eliminate through bankruptcy. The first thing to do is to talk to a bankruptcy attorney in San Bernardino about how you can protect your retirement accounts from your creditors.
Typically, bankruptcy looks for all of your assets in a search for money to pay off your creditors, especially in a Chapter 7. A retirement account, no matter what type it is, is considered an asset. However, it is one that is considered to be inviolate during bankruptcy. That is to say, the trustee can not seize it, nor can your creditors access it, as long as you leave the money in the account. You can not take money out or dissolve it entirely during the bankruptcy. Otherwise, the bankruptcy can be stopped right there and then, and your creditors can lay claim to the money.
Retirement accounts during bankruptcy are ignored and not considered to be a part of your income. It may be possible to keep contributing to your retirement account, but this is entirely dependent on the disposition of the court that you file in. Some courts don’t want to see any money going into retirement accounts while the case is open, others are more lenient and allow a regular contribution to continue. It’s best to talk with the lawyer about what can or can not be done.
Bankruptcy allows you to emerge almost completely free of debt and is best done with the assistance of a lawyer. This is something that a Debt Relief Agency can’t help you with, so don’t waste your time trying to settle your debt and avoid bankruptcy. The sooner you get yourself away from your debt, the sooner you start rebuilding your life and putting money towards your retirement again.
