Will I Lose My Retirement If I File Bankruptcy In Florida?

If you are consumed with debt, you likely feel trapped. Understandably, you might be tempted to pull money out of your 401(k) plan or another retirement account to help you get ahead. But, before you withdraw from your savings, consult an experienced Florida debt relief bankruptcy attorney.

At the law office of Lewis & Monroe, PLLC, in Orlando, we understand your desire to access your retirement funds when you need them the most. But we want to help you take the right steps so you can count on your retirement nest egg for the future. Reach out to our law firm today to schedule a free initial office consultation. Our law firm is committed to helping you get back on your feet without depleting your savings.

Obtain Debt Relief Without Losing Your Savings

Before tapping into your retirement account, consult with our bankruptcy attorneys. James Monroe is certified in consumer bankruptcy law by the American Board of Certification. Cynthia Lewis is a certified public accountant.

We are prepared to help you determine if filing for bankruptcy is the right option for you. During a free initial office consultation, they will address your concerns and common misconceptions about retirement accounts.

Why You Should Not Pay Off Debt With Retirement Assets

Many people wrongly assume creditors can garnish or access funds in retirement accounts recognized by the Internal Revenue Service (IRS). This misconception prompts many people to withdraw from their savings and use the funds, which results in substantial loss of future growth in retirement funds as well as tax consequences for early withdrawal. In reality, creditors cannot garnish funds from a variety of retirement accounts, including:

  • Individual retirement accounts (IRAs)
  • Roth IRAs
  • 401(k) and 403(b) savings plans

If you take a loan out from your retirement account to cover your debts, you risk losing your retirement nest egg that is actually safe from creditors. You could also be slapped with an additional tax for accessing the retirement funds, if you are not at a retirement age.

Obtain A Fresh Start Through Filing For Bankruptcy

Accessing funds from your retirement account could limit your bankruptcy options. Money taken from your retirement account and commingled with other funds in bank accounts could be seized by your creditors or become part of the property available for taking by the Chapter 7 Trustee if you file for bankruptcy. In addition, when filing for consumer bankruptcy, your income level will determine if you qualify. A 401(k) loan would be considered part of your income and could limit your chances of obtaining Chapter 7 debt relief.

Please consult an attorney before you withdraw funds from a retirement account. When you enlist our law firm, we will help you avoid short-term solutions that limit your options for obtaining a fresh start. We will take the time to evaluate your situation to determine if Chapter 7 or Chapter 13 bankruptcy is the right option for you.

Contact Us Today

Call 407-917-4147 or contact us online to schedule a free initial office consultation with an experienced bankruptcy attorney at our firm.

The hiring of a lawyer is an important decision that should not be based solely upon advertisements. Before you decide, ask us to send you free written information about our qualifications and experience.

We are a debt relief agency. We counsel clients according to federal bankruptcy code.