Palmdale Bankruptcy & Retirement Lawyers
When you have worked hard all your life and built retirement savings for your golden years, it is concerning to think that it could be at risk because of crippling debt. People of all ages fall behind on bills, including credit cards, medical bills, a mortgage, and others. As late fees and interest add up you could spiral deeper into debt, making retirement seem like a fleeting dream. However, you should realize that there are options to resolve debt, and bankruptcy may be the right fit to help you enjoy retirement.
There are different types of bankruptcy for individuals, and it is critical to find an option that aligns with your goals. You must address bankruptcy and retirement together, as they are interconnected when you are seeking to protect your interests. Our lawyers at Wadhwani & Shanfeld can advise you on the important issues that arise when you are leaving the workforce soon. Please contact us to set up a consultation with a Palmdale bankruptcy & retirement lawyer. You can also check out an overview.
Protections for Retirement in Bankruptcy
Chapter 7 is a popular choice for bankruptcy because it discharges qualifying debt, but there is a caveat to wiping out your debt. The bankruptcy trustee in charge of your case can sell certain assets to pay creditors. However, only non-exempt property can be liquidated. Exempt property cannot be sold, and many retirement accounts are in this category. You can protect:
- Your entire 401(k);
- All 403 profit-sharing plans;
- Deferred compensation benefits;
- Designated IRAs; and,
- Up to $1.5 million for an individual or Roth IRA.
In general, any retirement plan under the Employee Retirement Income Security Act (ERISA) will be shielded from the bankruptcy process. Note that the situation is different if you are receiving distributions from your retirement accounts. These amounts are not exempt once they are in your bank account. Another critical point is that you should never take premature distributions from retirement accounts to pay your debts.
Assistance with Bankruptcy Options
An important factor with bankruptcy is timing it along with your retirement plans. Your goal is to maximize retirement benefits, so you would aim to complete Chapter 7 discharge before you start receiving them. These cases take four to six months. Chapter 13 is also an option to reorganize your debt into monthly payments you can afford, though the debt repayment plan will take three to five years.
The Southern California bankruptcy lawyers at Wadhwani & Shanfeld will help you make wise decisions about Chapter 7 or Chapter 13. We will then:
- Prepare and the appropriate petition, along with financial documents;
- Appear at any required court hearings and the Chapter 13 meeting of creditors; and,
- Attend the final hearing for your case.
A Palmdale Bankruptcy and Retirement Lawyer Will Advise You
This information is useful for describing your options, but you will need qualified guidance when moving forward with a plan that suits your needs. To learn more, please contact Wadhwani & Shanfeld to speak to a Southern California bankruptcy and retirement lawyer. We can schedule a consultation to provide details.