Except for in specific, rare circumstances, your retirement accounts are considered exempt assets under bankruptcy law. This means that when you file for either Chapter 7 bankruptcy or Chapter 13 bankruptcy you get to keep the money in your retirement accounts. This holds true for IRAs, Roth IRAs, 401(k)s, pension plans, profit sharing plans, stock bonus plans, employee annuities, government deferred compensation plans and certain trusts.
When people find themselves struggling under the financial burden of unmanageable debt, they often begin wiping out their savings and retirement accounts in order to pay off their creditors. In the majority of instances, you should not use your retirement money to pay your creditors. Filing for bankruptcy is meant to give you a fresh start, and it would be difficult to accomplish that goal if you were required to begin saving for your retirement all over again.
If you are facing a financial crisis, you should speak with a qualified Michigan bankruptcy lawyer immediately. The faster you act, the faster you can get your finances back on track and begin life anew. For more information, contact Michigan bankruptcy attorney Lander McLoyd now.