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Arizona Bankruptcy and Retirement Accounts

If I file for Bankruptcy Will My Retirement Account be Taken?

Retirement Accounts and Bankruptcy in Arizona

In Arizona, most retirement accounts are exempt from creditors, and are protected when you file a bankruptcy case. Accounts such as 401ks, 403bs, most pensions, and IRAs are exempt in Arizona. Why do I specify Arizona? In Arizona we have our own set of exemptions that we use when someone files for bankruptcy relief here. We are considered an exemption opt out state, however we also have what are called "non-bankruptcy" federal exemptions that can be used here to protect assets like retirement accounts from creditors. Sound complicated? That's because it is, and I am still trying to figure out why anyone would want to put their assets at risk by filing a bankruptcy case without a lawyer.

Qualified Retirement Accounts and ERISA

Generally, for a retirement account to be exempt from creditors in bankruptcy, it must be ERISA qualified, exempt under a federal non-bankruptcy statute, or designated exempt under Arizona Revised Statute. Accounts that are not 401ks, IRA etc that hold stocks, bonds or other securities generally are not exempt. For example, a TD Ameritrade trading account that just holds stocks and bonds is not exempt from creditors.

Be Careful when Considering Bankruptcy with Retirement Assets.

Always proceed with caution when you are considering bankruptcy with a retirement account. It is important that you have an Arizona bankruptcy lawyer review your retirement assets to determine whether or not they are exempt. There are different rules for different accounts. For example, if you have an annuity, or whole life insurance policy, the rules are much different than they are for ERISA qualified accounts to be considered exempt. Also there are different rules for any accounts that are inherited or are survivor accounts.

Talk to a Tempe Bankruptcy Lawyer.

If you have a retirement account and are considering filing for bankruptcy relief, talk to a bankruptcy lawyer in any one of our offices in Tempe, Mesa, or Phoenix. IT is important to get sound legal advice if your are considering bankruptcy with a retirement account. I cannot stress that enough. We provide a free discreet consultation. Go to our website and submit your information for a call, or call us at 480-355-1377

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