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    I have worked with Seth and he is the utmost professional in how he works with his clients. If you need an attorney you can trust I would highly recommend the Law Office of Seth Hanson.
    --David
  • Very Professional.

    Everyone was very professional and efficient. Seth, and everyone that I had contact with were very knowledgeable. I was very pleased with how we were treated by his staff. My questions were always answered promptly. I was very pleased with the service I received and would not hesitate to refer someone to your firm.
    --Anonymous
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    You were very open and answered all of my questions. You never made me feel like I was asking a dumb question. I was comfortable with your knowledge of the law. It was hard for me to make this decision to move forward in my life. Everyone was friendly to me and respectful. Non-judgmental. Every question I asked was answered promptly and appropriately. I would recommend you.
    --Anonymous
  • More Than Expected!

    I found the firm's representation to be more than what I expected. I was always kept in the loop, all my questions were answered (whether or not I asked more than once the same question), and I felt completely supported by the firm staff when going through this (at times) scary ordeal. Thank you again.
    --Joanna
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    --Danielle

Can Creditors Touch My Retirement Account In Bankruptcy?

attorney, attorneys, lawyer, lawyers, California, CA, Bankruptcy, wage, garnishment, stockton, citrus heights, roseville, sacramento If you’re filing bankruptcy, you can rest easier knowing that your retirement savings in your 401(k) or any other ERISA qualified retirement account is protected from creditors. Let’s take a look at how retirement accounts may be impacted by bankruptcy?

ERISA Defined

ERISA is an acronym for Employee Retirement Income Security Act which is a 1974 law that requires that private employers provide information to you about the features of the retirement account, how it is funded, the fiduciary responsibilities for management of the plan along with other data. Any retirement account governed by ERISA is protected from creditors in bankruptcy.

Dollar Limits

There is a very high limit on ERISA retirement accounts protected in bankruptcy—well over a million dollars. You could have a ton of money in your retirement account and it would still be exempt and protected from creditors in bankruptcy. However, while the money sitting in your retirement account is exempt from creditor seizure, any disbursements you receive personally from that account is not. This means that if you file bankruptcy while receiving distributions from your ERISA retirement account, that money will be considered income in bankruptcy. That said, if you’re a debtor who qualifies for Chapter 7 bankruptcy, the trustee cannot take your retirement income to repay debts if you need that income to pay for your basics such as rent, food, and utilities.

Bankruptcy Fraud

If you transfer large amounts of cash into your retirement account right before filing bankruptcy those funds won’t be protected from creditors. Transferring large amounts of cash into your retirement account right before filing bankruptcy will be considered an illegal transfer or even an attempt to defraud the bankruptcy court. And once your actions are found to be fraudulent or illegal, your retirement funds can be seized and used to repay creditors. For example, if you’ve never contributed to your retirement fund and then suddenly invest $20,000 into a 401(k) sixty days before filing bankruptcy, your actions would come under scrutiny.

Retirement Contributions

If you file Chapter 13 bankruptcy, all of your disposable income will go to repay creditors over the course of three to five years. Your retirement account won’t be touched as long as it falls under ERISA and you haven’t made fraudulent transfers. However, you won’t be allowed to continue making retirement contributions while creditors go unpaid. The good news is that you will have more income at the close of your bankruptcy case to contribute to your retirement savings.

If you want to learn more about bankruptcy, contact us today.

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