What is a 403(b) Plan? 403(b) retirement plans are generally available to employees of educational institutions and certain non-profit organizations as determined by section 501(c)(3) of the Internal Revenue Code. The most common participants of the plan include teachers, school administrators, school personnel, nurses, doctors, professors, researchers, librarians, and ministers How do I know if […]
Are Non-ERISA 403(b) Plans Protected in Bankruptcy?
As long as your 401(k) is ERISA qualified and was exempted (protected) in your bankruptcy petition, you can most likely take a loan against the account while in an active Chapter 13 bankruptcy. However, you MUST get the court’s permission! When you are filing for bankruptcy, one of the top concerns is to protect your […]
Generally speaking, no. However, there are always exceptions.
Most retirement plans are ERISA qualified, which stands for Employee Retirement Income Security Act of 1974. This law was enacted to protect your retirement accounts from risky investments by your employer or plan administrator. If the plan is ERISA qualified, then your bankruptcy Trustee cannot seize your retirement money to pay your creditors.
Most personal property such as cash, bank accounts, furniture, clothes, and retirement plans can be protected by exemptions allowed by each state. Most people that file bankruptcy are allowed to keep most, if not all, of their personal property.
If you have recently filed a Chapter 7 bankruptcy or a Chapter 13 bankruptcy it is important that you ensure your retirement plans are ERISA qualified. The bankruptcy trustee, who represents your creditors, will probably require that you present him or her with evidence at the creditor’s meeting, showing that your retirement plan with your employer (if […]