Many individuals have spent years saving money to use when they are finally ready to retire. These 401(k) accounts remain untouched and sitting in a bank ready for use later in life. Starting over after filing for bankruptcy is hard enough without having to restart a retirement savings account. Watching your 401(k) plan disappear into the hands of a creditor can be a huge hit to an individual. Many individuals who face bankruptcy proceedings should ask their bankruptcy attorney in Sarasota, Florida about the state of their retirement accounts.
Debtors who file for chapter 7 or chapter 13 bankruptcy can rest easy knowing that their 401(k) accounts are safe from creditors. These retirement accounts are a protected asset under state and federal laws. No creditor can legally dip into your 410(k) plan. While savings, checking, brokerage accounts, and other assets can be seized and divided among creditors, a 401(k) will remain in the debtor’s possession.
An experienced bankruptcy attorney can help individuals understand what protected assets they will have at their end of bankruptcy proceeding. An experienced bankruptcy attorney will also let their clients know that withdrawing early from a 401(k) or a 401(k) loan are incredibly bad ideas. While the retirement account is protected, the cash that was withdrawn may not be.
401(k) and other retirement plans may be a detail that an individual may overlook when filing for bankruptcy. This is one of the many reasons that hiring the bankruptcy attorneys from Galarza Law Firm is the right move. Never file for bankruptcy on your own. Hire experienced lawyers that will protect your rights and your assets.