Boca Raton Bankruptcy & Retirement Lawyer
Florida is internationally known as a haven for retirees. But your own retirement planning may hit a snag if you are faced with mounting personal debts. Many Boca Raton residents face the prospect of raiding their own retirement accounts to pay off a mortgage, credit card bill, or car loan. This is often a short-sighted strategy that ends up depleting your retirement savings without making a significant dent in your overall debt.
The reality is you may be better off filing for bankruptcy. Many people avoid even considering bankruptcy because they fear losing what few assets they have left, including their IRA or 401(k) accounts. But in fact, the bankruptcy process may be the best way to protect their retirement.
The experienced Boca Raton bankruptcy & retirement lawyers at Nowack & Olson help many Floridians such as yourself deal with these matters every day. We have more than 20 years of experience in filing and handling bankruptcy cases for our clients. We understand how the bankruptcy system works, and more importantly, how it can protect your hard-earned retirement savings.
Federal Law Protects (Most) Retirement Accounts in Bankruptcy
Contrary to what you might believe, bankruptcy does not mean giving up all of your assets. That would actually defeat the entire purpose of the bankruptcy system. The idea is to restructure or discharge your debt so that you are left with sufficient assets to rebuild your life afterwards.
Congress sets the rules for bankruptcy, including which property is “exempt” or not subject to creditor claims. Just about all retirement and pension plans subject to the Employee Retirement Income Security Act are included among these congressional exemptions. This includes 401(k), 403(b), Keogh, profit-sharing, and most IRA plans. In the case of IRAs, your total exemption for all plans combined is limited to about $1.2 million per person, which means any amount in excess of this can be taken by the bankruptcy trustee to repay your creditors.
Also keep in mind, only money that is still in your retirement accounts when you file for bankruptcy is protected by the exemption. If you are currently receiving benefits from your retirement account, that money will be treated as income for purposes of bankruptcy. But even then, the bankruptcy court will not take retirement income that is required to meet your basic needs.
Have Questions About Bankruptcy and Your Retirement Accounts? Call Us Today to Schedule a Free Consultation
Indeed, if you are at the point where all of your income is coming from a retirement account, you may actually be judgment-proof, as there is no “disposable” income for your creditors to claim. But never assume this to be the case. You should always speak with a qualified Boca Raton bankruptcy and retirement lawyer who can review your situation and give you proper legal advice. If you have further questions regarding bankruptcy and retirement, call Nowack & Olson at 888-813-4737 to schedule a free consultation with a member of our legal team today.