Saving for retirement is an important part of financial planning. When debts pile up, you might be tempted to borrow from your retirement account to stay afloat. Sadly, we often hear that clients have drained their retirement accounts only to find themselves still struggling with large amounts of debt.
Before moving forward with a retirement account withdraw, you should consult with an experienced bankruptcy attorney to fully understand how your retirement account will be impacted when filing bankruptcy in Springfield Missouri.
Filing bankruptcy in Missouri and utilizing Missouri exemptions will almost always protect your retirement account. Debtors that have ERISA qualified accounts like an employer-sponsored 401k or 403b will find they can exempt, or protect, their retirement savings and still find relief from their creditors by filing bankruptcy. Other types of retirement accounts such as pensions and IRAs will also likely be exempt when filing a bankruptcy.
However, not all retirement accounts are treated equally when filing a bankruptcy. For example, there are specific laws regarding inherited IRAs and retirement accounts awarded to individuals pursuant to divorce decrees.
Similarly, retirement accounts that are already providing an ongoing payment, such as a pension, are treated differently than accounts that you are still funding. Separate stock accounts, bonds, and other investments may not be able to be exempted.
It is important to fully understand the bankruptcy exemptions that apply to these retirement accounts so that the accounts are not at risk.
Even if you believe you have an account that is not able to be exempted in a bankruptcy case, it is important to talk to an experienced bankruptcy attorney about the options you may have.
Bankruptcy planning can also be an essential part of the process. Our qualified bankruptcy attorneys can advise how to use the correct exemptions to protect your retirement assets and plan for a successful bankruptcy discharge while retaining the funds from your retirement account.