A question I hear all the time, from potential clients, is will I lose the money I have in a 401k or an IRA account if I have to file for bankruptcy in Florida? The answer is NO. Florida has created numerous laws called exemptions which allow the debtor to exempt , or prevent the court from taking some of their assets. Under Florida law any IRA or 401k that a debtor has will be fully exempted if they file for bankruptcy. However there are a few minor exceptions to this law.
Therefore clients who are thinking of filing for bankruptcy but continually push it off and take money out of their 401k to pay off credit cards or other unsecured creditors are doing themselves a disservice. They are using up assets that are fully exempt to pay off debts that will be discharged in the bankruptcy.
If you are thinking of filing for bankruptcy and have money in an IRA or a 401k more likely than not your retirement accounts will be exempted or safe from creditors. Shmucher Law, PL is a bankruptcy law firm with offices in Boca Raton, Fort Lauderdale, Miami, Plantation, and Sunrise Florida.