Can Bankruptcy Take Your 401(k) or IRA?
The answer to this question is unfortunately, yes. In certain situations, your 401(k) or IRA can be taken by creditors if you declare bankruptcy. This is because these retirement accounts are considered assets that can be liquidated in order to pay off your debts.
There are some exceptions to this rule, however. If you have a traditional IRA, the federal government offers some protection for these funds up to a certain amount. Additionally, if you have a 401(k) through your employer, most states offer some level of protection for these funds as well.
But even with these protections in place, it's still possible that your creditors could take some or all of your retirement savings if you declare bankruptcy. So it's important to understand the risks involved before making any decisions about whether or not to file for bankruptcy.
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