Tag Archives: Retirement

Bankruptcy Myth #1: Bankruptcy Will Wipe Out Your Personal Retirement Fund

There is a common misconception that bankruptcy will cause you to lose everything, including your retirement savings. First and most importantly, bankruptcy is for people who have assets they want to protect. Second, bankruptcy can protect your retirement savings from difficult financial situations. Depending on the type of retirement plan you have, the entirety of or most of your retirement savings are protected when filing for bankruptcy. In 2005, the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) was passed. The law protects many different types of retirement plans from creditors, such as 401(k), 401(b), defined benefit pension plans, IRAs, profit sharing plans, money purchase plans and ESOPs. If you have an ERISA-qualified plan, you may keep the entirety of your savings. ERISA, or the Employee Retirement Income Security Act, was a law passed prior to the BAPCPA. If you have a traditional or Roth IRA, you may keep a…
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