Most of your retirement accounts are fully protected in a bankruptcy case. Any retirement account that is “ERISA qualified” is completely excluded from the bankruptcy estate, meaning that there is no risk that the Trustee could take the asset to pay your creditors. This includes most retirement accounts such as 401(k)s, 403(b)s and IRAs. Other types of retirement accounts can be exempted or protected up to $1,283,025 per person. As such, it is almost never a good idea to use retirement funds to try to pay off your debts, risking penalties and fines when you could otherwise protect those funds for when you need them For more detail please see Can bankruptcy take your 401k or IRA?
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