Search Site
Menu
Could Chapter 7 Bankruptcy Affect Your Pension?

Could Chapter 7 Bankruptcy Affect Your Pension?

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:


Leave a Reply

Your email address will not be published. Required fields are marked *

Videos
Our Attorneys
Client Reviews
  • lawyers
    5.0/5.0

    Mr. Fields and his team of lawyers are the absolute best. They were professional, responded quickly to any emails or phone calls that I made and they worked quickly to get the ball rolling on things. They also made me feel so comfortable and welcomi...

    Read more

    Client

  • lawyers
    5.0/5.0

    My experience during this process was great! Jeff Field & Associates helped me every step of the way and was there if I needed their assistance.

    Read more

    Client

  • google
    5.0/5.0

    I would like to thank Jeff Field & Associates for their help with filing Bankruptcy. This was one of the hardest decisions that I have had to make. They walked me through the process and no matter what questions I had they answered them. They mad...

    Read more

    Rhonda Hays

  • google
    5.0/5.0

    This was a hard thing to do but Chris made it easy and explained everything in a way I understood the process. I would recommend anyone having to go through this to contact this office! Casey was great as well and the communication kept the whole tim...

    Read more

    Beth Carlin

  • google
    5.0/5.0

    The staff made a very stressful situation much easier to cope with. They treated me with kindness and respect. Chris and Laura are very professional and knowledgeable.

    Read more

    Anita York

See all reviews
Contact us

Please fill out the form below and one of our attorneys will contact you.

Quick Contact Form