How Bankruptcy Affects Your 401(k)
For most American workers, planning for retirement begins early and involves years of saving. One of the most common types of retirement saving plan, the 401(k) account, involves employer and employee-matched contributions to a savings account. There are a number of benefits associated with a 401(k) making it a desirable investment, including their tax-exempt status and their use for securing loans. Furthermore, most 401(k) accounts are exempt from bankruptcy proceedings.
If you or someone you know are under significant financial distress and can no longer afford to meet your debt obligations, pursuing bankruptcy protection may be your best option. Contact the Boca Raton bankruptcy lawyers of Eric N. Klein & Associates, P.A., at 561-353-2800 to discuss the details of your situation with an experienced legal professional.
Bankruptcy Exemptions
Certain types of bankruptcy involve the liquidation of debtor assets in order to satisfy creditors’ demands to the fullest extent. However, certain types of assets are typically held to be exempt from the bankruptcy process, including most 401(k) accounts. In order to be exempt, a 401(k) must either:
- Be an ERISA qualified 401(k) plan
- Be necessary to support dependants if the 401(k) plan is not ERISA qualified
401(k) plans which adhere to these guidelines are exempt from the bankruptcy process in most cases.
Contact Us
If you or someone you know has overwhelming debt obligations, you should consider the benefits of bankruptcy protection. Contact the Boca Raton bankruptcy attorneys of Eric N. Klein & Associates, P.A., by calling 561-353-2800 to learn more about your potential legal and financial options.
