When individuals are filing for bankruptcy they have many different concerns. One of these is what their creditors can take from them, and also what the bankruptcy trustee may determine as being a nonexempt property. A lot of individuals have retirement accounts and are very concerned as to what will happen to these in either a Chapter 7 or Chapter 13 bankruptcy.
Assets and Estates
In 2005 the bankruptcy laws were updated and during this time it was deemed that retirement and pension plan money would be exempt in the bankruptcies. While for the most part this includes all pension and retirement funds there are a few exceptions.
The traditional and Roth IRAs are not totally exempt. Within these you are allowed to have up to $1,245,475. Anything over and above this may not be exempt. This figure changes about every three years as it takes into account the cost of living increases. What you have to realize though, is that if you are receiving retirement benefits as income then these will not be classed as being exempt in your Chapter 7 bankruptcy. At the same time any money that you are receiving as income for retirement benefits that you need to support you and your family cannot be touched in your bankruptcy. If you are filing for a Chapter 13 bankruptcy then when calculating your income you would have to include the retirement income in your repayment plan.
The bankruptcy procedures can be quite complex and it is always wise to choose an experienced New Albany bankruptcy attorney to assist you with your bankruptcy matters no matter whether you are filing for Chapter 7 or Chapter 13.
