By: Darrell Castle

You may be struggling with debt and considering filing for bankruptcy. But something’s stopping you. And I think I know what it is.


If you’re like the people I’ve met who are focused on retiring to enjoy the late years of life, you may be concerned about losing your retirement money. You may have a lot of money stored away and you’re just waiting to hit the “retirement button.” Despite your fears, a bankruptcy won’t hinder that!

Your IRA is exempt in a bankruptcy. That means your retirement money — if it’s a qualified retirement plan — can’t be touched when you file for bankruptcy. That’s true for both Chapter 7 and Chapter 13.

And an IRA isn’t the only retirement or pension plan that’s protected. Others include:

  • 401(K)
  • 403(B)
  • Keoghs
  • profit-sharing plans
  • money purchase plans
  • defined benefit plans

There’s One Small Catch

For IRAs, there’s one possible limitation. If you have more than $1,245,475 per person in your IRA, then any excess can be taken in bankruptcy to pay back your creditors. This amount is adjusted for cost-of-living increases every three years.

And when your retirement benefits are used as your income, the bankruptcy court can take amounts that are above and beyond what you need for support to pay your creditors in a Chapter 7. In a Chapter 13, that excess amount will go into your repayment plan.

Our Bankruptcy Attorneys in Memphis, TN Can Help

All of this may sound confusing or complex. But an experienced bankruptcy attorney knows the laws inside and out and can break it down for you. If you’re struggling with debt you can’t pay, come sit and talk with us. Let’s see how we can help you.

Want a Free Bankruptcy Consultation?

Call (901) 327-2100 today for a free bankruptcy consultation. Or you can contact us online.

Our team is informative, detailed and makes the process easy. And our clients will tell you the same thing.