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Are 401(k)s and Retirement Accounts Exempt in Bankruptcy?

Yes. Whether you choose to file for Chapter 7 or Chapter 13 bankruptcy, you will very likely be able to keep your retirement. Bankruptcy law is rooted in public policy. The idea being that debt shouldn't crush familes. People should have a chance to start over with out losing all of their property in the process. As a reflection of this idea, state legislatures, as well as the federal government, have enacted exemption laws. Exemption laws protect property from creditors and from the bankruptcy trustee. 

While a phone call from a debt collector can be intimidating and stressful, the state of California provides consumers with a comprehensive set of rights to ensure that the debt collection process is fair and reasonable. A consumer should know her rights in order to take advantage of the protection of the law. Before we delve deeper into California's debt collection laws, the reader should be aware that federal law also prohibits harassment by debt collectors.

Most people know that filing for chapter 7 bankruptcy will get rid of credit card debt and medical bills, however, many Californians are confused as to whether personal bankruptcy will dischage debts owed to the IRS or to the State of California. 

SEE ALSO: Do I Qualify for Chaoter 7 Bankruptcy in California?

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Drawn in by slick advertising campaigns, tens of thousands of Americans are enrolling in Debt Settlement programs in an effort to resolve their debt issues.  Attracted to promises of eliminating more than 50% of their debt by negotiating with their creditors, Americans are unfortunately finding that in most cases the reality does not match the rhetoric. 

As bankruptcy attorneys, one question we are regularly asked is whether or not our clients can keep their home in bankruptcy? Fortunately, the answer is almost always "yes" for those who have stable income and can afford their regular ongoing mortgage payments.