ERISA 401K plans are protected from bankruptcy, but not all 401K plans are ERISA. If you’re considering bankruptcy, please contact us today for a free consultation and we will evaluate your case and review your options.

Protected assets, such as those in an ERISA 401k, can not be pursued by creditors in the event of a bankruptcy filing. Your retirement fund will continue to grow until maturity, and can be withdrawn normally at that time.

If the assets are removed early however, that money loses it’s tax deferred status and is subject to income taxes. Additionally, anything purchased with it are now assets that can be seized by creditors.

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In many cases reducing your expenses and tightly controlling your budget in order to pay your bills is a much better strategy when compared to cashing out your retirement account earlier than planned.

Is my 401k ERISA Qualified?

People with 401k plans who are filing bankruptcy are often asked by their bankruptcy lawyer to obtain proof that their 401k plan is ERISA qualified.

Most employer sponsored 401k plans are indeed ERISA qualified.

ERISA is an acronym for the Employee Retirement Income Security Act. You can read more about this act on the US Department of Labor’s website here: ERISA. It is rare but some 401k plans are not ERISA qualified, such as government employees. Government employees usually have government retirement plans.

We currently assist bankruptcy clients in the following counties:

  • Los Angeles County
  • San Fernando Valley
  • Orange County
  • San Bernardino County
  • Riverside County
  • Ventura County
  • Santa Barbara County