As a bankruptcy attorney in Asheville, one of my primary goals is to establish and protect retirement funds for my clients. Very few people can work until the day they die. Protecting client accounts and contributing to retirement accounts (instead of paying credit card minimums) after a bankruptcy filing are almost always a part of our plan for recovery.
Funds you keep in a 401(k), 403(b), IRA, or other types of retirement accounts are fully exempt under North Carolina law. The same is true for many life insurance policies, annuities, and pensions. This means that your creditors cannot touch these exempt funds whether you file a bankruptcy case or not.
Unfortunately, it is very common for a potential client to explain they have already withdrawn from their retirement accounts when financial trouble first hit. This subjects these funds to seizure by your creditors, and can cause problems with preferential payments as well.
Better results can be achieved by discharging debt before exhausting your retirement savings. By filing a bankruptcy case, for instance, we can preserve your retirement funds while discharging debt. Moreover, by eliminating your monthly credit card and medical bills, we can establish a plan to increase your monthly retirement contributions along with your monthly budget.
If you need to withdraw funds from a retirement account to pay monthly bills, speak to a professional first. For those of you who have already withdrawn funds, now is the time to seek help to minimize the damage. For those of you in Western North Carolina, I would be pleased to talk with you during a free, initial consultation.
*The information contained on this website is not intended and does not constitute the providing of any legal advice or any legal opinions or services to any user thereof. The information available on or through this web page is not intended and shall not be used as a substitute for the advice and consultation provided by an attorney. Any factual examples used to illustrate concepts are hypothetical and do not depict actual events or real persons.
