Bankruptcy typically doesn't affect retirement accounts protected by federal law. These accounts are shielded from creditors so they can't be used to pay off your debts. This applies to both Chapter 7 and Chapter 13 bankruptcies.

However, there are some exceptions to be aware of:

  • Money Withdrawn Early: Once you take money out of a retirement account, the protection disappears. The withdrawn funds become just like any other asset and could be used to pay creditors in bankruptcy.
  • Contribution Limits: There might be limits on how much of certain retirement accounts (like IRAs) are protected depending on your state's exemptions.

If you're considering bankruptcy, it's important to consult with an attorney to understand how it will impact your specific situation, including your retirement savings.

Castle Law Office has been handling bankruptcies for Kansas City clients for more than 14 years. If you need the fresh start bankruptcy can provide, call us today at 816-842-6200 to speak with an attorney. Or click here to email us and schedule your free consultation.

Jason C. Amerine
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President and Owner, Castle Law Office of Kansas City