Recovery Law Group

Indeed, your 401(k) is typically secure in bankruptcy, which will likely be a relief if you are considering filing. According to the Employee Retirement Income Security Act, they are regarded as exempt (ERISA). Most of your other retirement accounts are also, as long as you continue contributing to them. When you liquidate assets in Chapter 7 bankruptcy, creditors won't have access to your 401(k), and it won't be considered when your Chapter 13 payment plan is established. You'll need to see a bankruptcy lawyer to confirm how your 401(k) will be handled because your state determines the specific bankruptcy exemptions and exclusions. Your retirement funds may still be at risk during bankruptcy, even though your 401(k) is usually exempt.  BANKRUPTCY: CHAPTER 7 VS CHAPTER 13  Your 401(k) plan may qualify under the Employee Retirement Income Security Act (ERISA), which most employer plans do, in Chapter 7 bankruptcy. It prevents a trustee from using your savings to settle the d...