Will Your Pension Survive Your Bankruptcy?

December 23, 2012

Increasingly, older Americans are declaring bankruptcy as compared to years past. Factors such as persistently rising health care costs, longer life spans, insufficient savings, and below-expectation stock market performance are just some of the factors that have put added pressure on retirees and older workers.


If this sounds familiar, you may have asked yourself whether you should declare bankruptcy. With relatively low secured debts, large unsecured debts, and minimal income, Chapter 13 may be a meaningful and advantageous option. The limitation for many potential debtors, therefore, is whether their pension will survive bankruptcy.


In most situations, a bankruptcy debtor’s pension is protected from creditors. Bankruptcy law provides protections for most retirement plans, such as IRAs, government pensions, and 401(k)s. Notably, however, a few retirement plans may not be protected in bankruptcy, like employee stock purchase plans (ESPP).


Want to find out if your pension or retirement account will survive your bankruptcy filing? The attorneys and dedicated professionals at the law firm of Fears Nachawati can help you answer this and many more questions. To learn everything you need to know and to take your next steps to financial freedom, talk to us. We’re ready to help you.

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