Hi there, this is Jonathan Ginsberg. I’d like
to address a question that I get sometimes from my clients about what they
should do if they have a 401K, a pension, an IRA, or something like
that, and they’re thinking about filing bankruptcy. The questions I get either
are should I liquidate my 401K or pension and use it to try to pay down
some bills, or should I liquidate it because I’m afraid I’m going
to lose it. What should I do? Of course, the worst are when people have already
liquidated and they come in and say, okay I’ve already liquidated and
gone through everything I own including my retirement accounts, now I need
to file bankruptcy. Let me make this as clear as I can possibly
make it. If you have a pension, 401K, IRA, or any type of qualified retirement
plan, it is most likely going to be considered exempt property in
bankruptcy – meaning that nobody can touch it. So, the last thing you want
to do, the absolute last thing you want to do prior to filing bankruptcy,
is to touch, raid, borrow against, or do anything at all to your 401K,
your IRA, or your pension. Because if you file bankruptcy it’s not going
to be touched. There’s no reason to mortgage, as it were, your retirement,
the money you’re going to have for when you’re older or disabled. There’s
no reason to touch that when you’re thinking about filing bankruptcy. You can literally file bankruptcy, wipe out
a hundred thousand dollars in debt, restructure your mortgage, restructure
your car loan – all the things that bankruptcy lets you do – and in the meantime
have no impact whatsoever on your retirement plans. So, if you were
told otherwise, that’s incorrect. You should not do anything with your retirement
money, your pension, 401K, IRA, or whatever the case may be. If you hear differently, if you’re thinking
about filing bankruptcy, if you have any questions, I urge you to call me.
My number is 770-393-4985. Or, if you don’t call me call a bankruptcy lawyer.
He’ll tell you the same thing. Don’t touch anything. It’s not worth
it. You’re much better off keeping that money available for when you
need it and not using it up to pay creditors. Again, when you’re filing bankruptcy you’ve
got to look at the economic impact of it. I realize there are some moral
issues that come into play. We can certainly talk about that. But, that big
picture, you’re better off I think in the long run, you and your family,
having your retirement money. So, please don’t touch it without talking
to a lawyer, and you probably don’t want to touch it at all. I hope that’s been helpful in answering that
question. Any more questions, please call me, or e-mail me, or send me a
comment on the blog or wherever you can get a hold of me. I’m happy to answer
those questions for you. Again, Jonathan Ginsberg here, until next
time. I’ll talk to you soon.