When I am meeting with clients, I get a lot of questions about retirement plans.  Often, I see clients who have very little equity in property, and even less cash, but they may have $25,000 or $30,000 in an IRA or a 401(k).   How does having several thousand dollars in a retirement plan impact your options regarding a bankruptcy filing?

To answer this question, I am going to point you to a very helpful series of articles written by my colleague Damon Duncan, a bankruptcy lawyer in Charlotte.  Although Damon is writing for the benefit of North Carolina bankruptcy filers, the principles he discusses are applicable to Georgia filings as well:

• If I file bankruptcy will I lose my retirement?
• What is an ERISA qualified retirement plan?
• How do I know if  my 401(k) plan is ERISA qualified?
• Can I take out a 401(k) loan after filing Chapter 13?

Generally, funds in an ERISA qualified retirement plan are considered “exempt” assets.  This means that your retirement plan is protected from the claims of creditors and these funds are protected from the reach of the trustee.  To put this another way, in most cases you could file a Chapter 7 and wipe out $100,000 of credit card debt, but you would exit bankruptcy with your $30,000 IRA intact.More on Retirement Plans and Bankruptcy