When you declare bankruptcy, many of your assets may be up for grabs by the court. The difference will depend on whether you file for Chapter 7 or Chapter 13 bankruptcy.
The good news is that you will not lose all your property in bankruptcy. Most of the time, your retirement accounts are protected from your creditors. The important thing is that you do not want to withdraw money from those accounts after you file for bankruptcy.
The Accounts Covered by ERISA
Accounts that come under the Employee Retirement Income Security Act (ERISA),
AllLaw says, are protected from the bankruptcy court. ERISA does not protect all 401(k)s and other retirement plans. To be sure, you need to check with your employer.
ERISA Does Not Cover Some Retirement Plans
Most 401(k)s are covered by ERISA if offered by an employer. Other plans are not covered, including IRAs and state-employee pensions. Plans such as simplified employee pensions (SEPs) and most 403(b)s are also not covered.
