Can Bankruptcy Take Your 401(k) or IRA?

When a person files for bankruptcy, the court will order a “means test” to see if the person is eligible. This test looks at the debtor's monthly income and compares it to the state's median income. If the debtor's income is below the state median, they are usually able to file for Chapter 7 bankruptcy. If the debtor's income is above the state median, they may still be able to file for Chapter 7, but they will need to pass a “means test” first.

If a debtor files for Chapter 7 bankruptcy and their income is above the state median, their assets will be subject to liquidation. This means that their 401(k) or IRA could be taken by the bankruptcy trustee and used to pay off creditors. However, there are some exceptions that can protect retirement assets in bankruptcy.

The Law Offices of Omar Zambrano has helped thousands of people and businesses in the past to get out of debt and start over.

Our goal is it to help you find a fresh start FAST!

Schedule your free consultation today! By Calling 626-338-5505 or visiting us at 12738 Ramona Blvd Baldwin Park CA 91706