In most cases, bankruptcy is the result of an illness, accident or unsuccessful
business. Many people believe that they will lose all of their assets
if they file bankruptcy; this is not the case. A good
bankruptcy lawyer can help you to identify assets that the court will allow you to keep,
and thus help you to make a rational decision about whether filing bankrupcy
is right for you.
Here is a short overview of some of the types of assets that you may be
able to keep in Chapter 7 bankruptcy.
401k and Other ERISA Accounts
The entire value of 401k, 403b and other ERISA accounts are exempt from
bankruptcy, regardless of whether you file under federal or state rules.
If no fraud has occurred, you can keep millions of dollars in these types
Traditional and Roth IRA Accounts
Traditional and Roth IRA accounts are exempt in bankruptcy up to a certain
limit. In 2005, congress defined that limit as $1 million; the limit increases
with inflation every year. Currently, the Traditional and Roth IRA limit
is about $1.3 million.
Some of the value of your home may be exempt in bankruptcy. Massachusetts
allows debtors to
exempt up to $500,000 of their home equity in a bankruptcy filing. If a homeowner has not filed
for a Declaration of Homestead, this exemption may be reduced to $125,000.
Understanding which assets are exempt is important to deciding whether
a bankruptcy filing is right for you. Exemptions may not apply if you
have debts related to spousal support, child support or some other situations.
This article is not legal advice; if you need help determining which assets
might be exempt in your situation, please