You’ve worked hard to earn a pension, and you may even rely on it for the bulk of your income during retirement. If you need to file for bankruptcy protection, however, you may wonder what will happen to your pension. Will it be subject to the discharge process?
Depending on your circumstances, you may be able to exempt at least part of your pension in a Chapter 7 bankruptcy.
Exempt pensions
Pensions may be fully or partially exempt under bankruptcy laws depending on the type of pension you have. Those classified as fully exempt are considered as such because their assets are technically not part of the bankruptcy estate. Any retirement funds that are tax-exempt under federal law, including 401, 403 and 408 plans, would be exempt from your bankruptcy, as would ERISA-qualified pension or retirement funds.
Other commonly exempt pensions include deferred compensation plans, certain government retirement plans, and plans provided to partnerships, churches, governments or proprietorships.
In addition to these federally exempt pensions, Georgia state law makes the following types of pensions and retirement plans exempt:
- IRAs
- IRA payments necessary for support
- Any other pensions necessary for support
If your retirement account is a pension, stock bonus plan, annuity or profit-sharing plan, for example, you may exempt any amount of the plan you need to support yourself and your dependents, within reason. You simply need to prove to the bankruptcy trustee that these funds are necessary for the living expenses of you and your dependents.
Nonexempt pensions
There are other types of pensions that cannot be exempted under any circumstances. These include those that have been improperly funded or that are not recognized by federal tax law as retirement plans, along with inherited plans (except for plans inherited from a spouse) and plans funded by rollovers from previous funds, if that rollover was noncompliant with federal tax law.
For further guidance on how your bankruptcy could affect your pension, speak with an experienced chapter 7 bankruptcy attorney at Jeff Field & Associates. Call us today at 404-381-1278 or contact us online to set up a free initial consultation.
Related Articles:
- Can You Improve Your Credit Score With Bankruptcy?
- Can You File for Bankruptcy Because of Medical Bills?
- Can You Stop Child Support With Bankruptcy?
-
5.0/5.0Starting the process of bankruptcy can seem scary. However, working with Jeff Field & Associates made it very easy. They explained everything so clearly and helped my spouse and I, walk through every step of the process. Definitely recommend!
-
5.0/5.0
I highly recommend them the did a great job with my case and made the steps very easy they worked with me every step of the way on completing all my paperwork highly recommended them
-
5.0/5.0
A few months ago, I had to file for bankruptcy, and this team made the whole process so smooth. They answered every single question I had and walked me through everything step by step. Honestly, all I had to do was sit back and let them handle it; Th...
-
5.0/5.0
An exceptional bankruptcy attorney—professional, compassionate, and highly knowledgeable. They guided me through every step with clarity and confidence, easing my stress. I truly felt supported and well-represented. Highly recommend their services ...
-
5.0/5.0
I was referred to Jeff Field by a co worker my experience with them was effortless after initial contact everything else flowed well. I was able to ask questions, and received answers immediately. Everything was done by email and over the phone very ...
Please fill out the form below and one of our attorneys will contact you.
