So many people are upside down right now on their home loans (1 out of 5 households), meaning they owe more than their home is worth, that many people are considering bankruptcy. Furthermore, they’re asking the question when considering bankruptcy, will I lose my retirement funds in my retirement plan (such as a 401k, 403b, 408, 408A, 414, 457b, ira – both roth and traditional, and also including 529 plans and coverdell)?
The good news is no, in most every case you will not have to forfeit all of those retirement dollars you’ve been saving – they are considered exempt in most every case in both chapter 13, and chapter 7. There are limits however, of how much is exempt, however most of us don’t need to even worry about this. The fact is, each spouse retirement plan is protected to the amount of $1,095,000.
Now, this same protection is not provided to those whom have built their retirement portfolio’s under fraudulent premises, let’s just hope that’s not your case.
I hope this stops some of your fears, and this can make you breathe a sigh of relief. For more articles like this to be delivered directly to your inbox, sign up in the top right corner! It costs nothing and will likely help you save money!