Is My 401k or Retirement Safe in a Chapter 7 Bankruptcy?

The short answer is maybe — maybe not! According to an Eastern District of Tennessee case, the Chapter 7 Trustee may take a 401k or IRA where the account is set up in a certain way. It is important to provide the documents used to open the account to your attorney. In some cases, the small 401k or IRA may be protected in the $10,000 personal property exemption. However, if you have more than that in your 401k or IRA it is imperative to provide the information to the attorney before filing to determine the amount protected — to ensure you are making an informed decision on whether to file a Chapter 7.

Reference:
Podis & Podis
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