QUESTION
Are 401K's, IRA's, and Stocks exempt from bankruptcy liquidation? What about savings accounts and checking accounts?
Asked on Jul 06th, 2017 on Bankruptcy - California
6 ANSWERS
IRA's, 401(k)'s, & Pensions. Not the other items.
Answered on Sep 21st, 2017 at 4:03 AM
Commercial & Bankruptcy Law Attorney serving Powell, OH
at
Ronald K. Nims
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401(k) and IRA accounts (along with other tax exempt retirement accounts) are exempt from liquidation in bankruptcy. Stocks and bank accounts are not generally exempt, although small accounts and a portion of larger accounts are exempt.
Answered on Sep 21st, 2017 at 4:02 AM
Pension plans qualified under ERISA are not property of your estate...thus safe; however, stocks and checking and savings accounts are property of your estate and are potentially subject to liquidation by the trustee. All depends upon your ability to exempt the value of these accounts.
Answered on Sep 21st, 2017 at 4:02 AM
1 Award
If the 401(k) and IRA has been set up and funded properly, then those will be exempt. Generally stocks and bank accounts are not fully exempt. A person will typically utilize a "wildcard" exemption on these accounts, but the amount of wildcard you can allocate will depend on the value of your other assets.
Answered on Sep 21st, 2017 at 4:02 AM
Bankruptcy Law Attorney serving Livingston, NJ
Partner at
Law Office of Stuart M. Nachbar, P.C.
2 Awards
In New Jersey, 401K and IRA are exempt under 11 USC 523(d)(12). Checking and savings accounts are exempted under the wildcard exemption of 11 USC 523(d)(5) but be careful on the amounts.
Answered on Sep 20th, 2017 at 9:53 AM
Retirement accounts are exempt. Stocks and bank accounts are not.
Answered on Sep 20th, 2017 at 9:52 AM