Are Retirement Accounts Protected in Bankruptcy?

ERISA 401(k) and similar plans are often well protected. IRAs have a separate inflation-adjusted cap — we do not reprint the current figure. Inherited IRAs are treated more harshly. See the official Code text and your plan documents. Cashing out before filing can create tax debt and a spend-down the trustee will ask about.

Do not treat every “retirement” account alike

Frequently asked questions

Related resources

• Alabama Bankruptcy Exemptions — Alabama Bankruptcy Exemptions

  When Alabama exemption law applies, Alabama generally requires debtors to use its state exemption system rather than the federal § 522(d) exemption list. Homestead and personal-property exemptions are central to that analysis, and separate federal protections can apply to certain property. Recent interstate moves can change which exemption law applies.

• Georgia Bankruptcy Exemptions Explained — Georgia Bankruptcy Exemptions Explained

  When Georgia exemption law applies, O.C.G.A. § 44-13-100 provides exemptions for categories including a homestead, motor vehicle, household property, tools of the trade, and other interests. The statute also includes a wildcard provision. Current statutory amounts should be used, and recent interstate moves can change which exemption law applies.

• Inheritances and Bankruptcy — Inheritances and Bankruptcy

  If a debtor becomes entitled, within 180 days after filing, to certain property through inheritance, a life-insurance benefit, or a qualifying property settlement, § 541(a)(5) can bring that interest into the bankruptcy estate. Disclosure remains important even if the property is not received until later. Chapter 13 can involve additional postpetition-property considerations.

• Is Life Insurance Protected in Bankruptcy? — Is Life Insurance Protected in Bankruptcy?

  A term life policy typically has no cash surrender value, while whole-life and similar policies may have cash value that must be disclosed as an asset. Whether that value can be protected depends on the applicable exemption law, ownership, policy terms, and beneficiaries. If a debtor becomes entitled to certain life-insurance proceeds as a beneficiary within 180 days after filing, § 541(a)(5) can bring those proceeds into the bankruptcy estate.

• What Property Can You Keep in Bankruptcy? — What Property Can You Keep in Bankruptcy?

  Filing bankruptcy does not automatically mean losing everything you own. Exemption laws may protect some or all of the equity in certain property. For debtors whose applicable exemption law is Alabama or Georgia, those states generally require use of their state exemption systems rather than the federal § 522(d) list. If you moved between states during the Bankruptcy Code’s domicile lookback period, a different state’s exemption law may apply and, in limited circumstances, the federal exemptions may become available. Keeping financed property also depends on liens, equity, payment status, and the chapter filed.