Filing bankruptcy these days has become a somewhat common occurrence. The economy continues to cling to life support and so do many families when it comes to their personal finances. With unemployment soaring, rising inflation, skyrocketing gas process, increasing costs for health care and medical insurance, and a slumping housing market, it is no wonder that so many people are experiencing a financial crisis. At this point filing bankruptcy becomes a serious option to consider. Bankruptcy, in a nutshell, is eliminating or paying off one's debt legally under the protection of the government. Bankruptcy was created by Congress as a way to allow honest hard working individuals or families a way to alleviate overwhelming debt and giving them a fresh financial start.This all sounds great, but many people have a lot of unanswered questions when deciding if bankruptcy is right for them. A few of the most commonly asked bankruptcy questions are;
What can bankruptcy do for me?
What are the advantages as well as the disadvantages to filing bankruptcy?
How long will a bankruptcy filing stay on my credit report? How bad will my credit be affected?
How much will bankruptcy cost and how long will it take?
Will I lose my stuff when I file bankruptcy?
Lastly, one of the most common fears, and questions, that people want to know when they are seriously considering filing bankruptcy is, will I lose my retirement if I file for bankruptcy? Basically, like all bankruptcy questions, this must be discussed with a knowledgeable bankruptcy attorney who can look at the individual's financial situation and determine the possible outcomes. Generally speaking, the answer to whether or not an individual will lose their retirement benefits if they choose to file bankruptcy is most likely they will not. The reason being is that IRA's, 401(k), 401(b), and actually most other retirement plans are exempt from being taken by creditors or the bankruptcy court under federal law, state law, or both. For an individual's retirement plan to be considered exempt it has to be a qualified retirement plan, which for that matter, most retirement plans are qualified plans. There is the matter that different states have different exemptions that must be applied and followed and there may be some exceptions to the rule.
One exception for example, is that if an individual has a retirement plan and they make some large payments into the retirement plan prior to filing bankruptcy, they may find that the payments will not be exempt and they will lose them. Before moving any assets or property around always consult with a bankruptcy attorney to determine if there will be any negative repercussions.
The bottom line is, bankruptcy can be a complicated and convoluted process. However, with the help of an experienced bankruptcy attorney, most people will find that filing bankruptcy will be easier and less painful than once thought. A bankruptcy attorney can take all of the guesswork out of filing, answer all of your questions, and help the individual to retain most of their personal property and possessions, if not all.
The author is a professional that formed FilingBankruptcyPros.Com which provides information for debtors considering filing bankruptcy under Chapter 7 and Chapter 13 bankruptcy and helps individuals stop foreclosure and eliminate their debt by putting them in touch with a local bankruptcy attorney.
By Lisa Michelle Jones
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