See a qualified bankruptcy attorney before using your retirement account
By: Darrell Castle
Can you use your retirement account to fund your bankruptcy?
Hi, I’m Darrell Castle and I’m an attorney licensed to practice law in the state of Tennessee and the answer to that question is YES, you can use your retirement funds to fund your bankruptcy.
But the real question is, do you really need to do that? Remember that your retirement account is fully exempt in bankruptcy. That means that it’s not available to creditors or to the bankruptcy trustee. This is true in most cases. The only case it’s really not true in is if you inherit the retirement account. Most of them are not inherited. Most of them are earned – money put into this account by you personally or by your employer.
However, is it very important money so you should think twice about liquidating it. In fact, never liquidate it prior to doing a bankruptcy. Never ever do that because then it would not be exempt; then your creditors would have access to it or the bankruptcy trustee would have access to it.
However, liquidating enough of it to fund your bankruptcy – a relatively small amount of money – might not be a bad idea sometimes if that is the only way you can get the money it takes to organize your life. You might consider liquidating just enough, and no more, to fund that bankruptcy and thus turn your life around. It’s something to think about.
But you should never do anything like that with regards to your retirement account without seeing an experienced bankruptcy practitioner. You should always do that before you make any decision like that. A one hour free appointment with a qualified bankruptcy attorney might save you a lot of money in the future, folks.