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Under what conditions I can keep my 401(K) bankruptcy in Austin, Texas

 If you are filing for bankruptcy, you might have heard about 401(K), which is generally considered a safe bankruptcy. They are considered exempt under the Employee Retirement Income Security Act (ERISA) that requires your employer to keep your retirement funds in a trust, which remains safe from creditors. The funds in 401(K) are not liquid assets, and as such, can’t be used to pay back your debts during bankruptcy. In most cases, when you want to keep my 401(K) in bankruptcy, all your disposable income will go toward paying your creditors. Some states also allow you to make retirement contributions, but you will need to speak about it with the lawyer who is dealing with your case to keep my 401(K) in bankruptcy.   

  

However, IRA may seize your 401(K) or other retirement accounts if you have unpaid federal income tax and associated fees. While the federal government has the ability to seize money from your 401(K) the state and local authorities generally do not have it. Nevertheless, you can keep my 401(K) in bankruptcy in case you owe state income or property taxes. Almost all pension and 401(K) savings plans, which are qualified under ERISA, are excluded from the bankruptcy estate. However, there are certain exemptions to the rule to keep my 401(K) in bankruptcy. Retirement plans with only single participant, and plans originating in self-employment may become part of bankruptcy estate unless subjected to exemption. Creditors can stake claims to those funds unless efforts are made to keep my 401(K) in bankruptcy. 

  

Filing for bankruptcy in Austin, Texas, under Chapter 7 and Chapter 13   

If your debts have become unmanageable, then you can consider filing for bankruptcy in Austin TX, which is a legal recourse to provide you with a fresh financial start. When filing for personal bankruptcy, you generally have two options – you can file for it either under Chapter 7 or Chapter 13. The vast majority of cases for filing bankruptcy in Austin TX can be understood, given that people may owe mortgage, credit card debt, student loan, or an auto loan, or perhaps all four of them together, and don’t have the income to pay off their debt.   



  

Chapter 7 bankruptcy, also known as straight bankruptcy, is what most people in Austion consider when they plan for filing bankruptcy in Austin, TX. A federal court trustee will supervise the sale of any assets that aren’t exempt, and the money from the proceeds will go toward paying your creditors. The balance of what you owe is eliminated under Chapter 7 bankruptcy. However, it won’t discharge you of certain kinds of debts, like a court order alimony for child support.   

  

Chapter 13 bankruptcy works slightly differently. Those filing bankruptcy Austin TX under Chapter 13 can keep their property in exchange for partially or completely repaying their debt. The bankruptcy court and your attorney will negotiate a three- to five-year repayment plan wherein you may agree to repay all or part of your debts. When you complete the agreed repayment plan, your debt is discharged, even if you paid a part of it.      

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