In bankruptcy you can protect your retirement accounts if they are ERISA-qualified: things like 401(k)s, 403(b)s, and pension plans, or IRAs (IRAs are not ERISA-qualified, but they are still protected due to the U.S. Supreme Court opinion in Rousey v. Jacoway, 544 U.S. 320 (2005). By this I mean that they are protected from the depredations of bankruptcy trustees, and hence from the claims of creditors, because they can be exempted using the appropriate exemption table. In a previous blog I discussed the exemption process in great detail. As long as you hire a high-quality attorney you should be able to keep all of your retirement. In sum, if you file for bankruptcy protection your retirement accounts will not be in jeopardy – at least not because of your bankruptcy.
But what about the underlying solvency of your retirement accounts? How sure are you about the stability of the accounts themselves? Is your retirement plan one of the many that invest in municipal, state, and federal bonds? If so, do you know how safe these investment vehicles are?
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