The uncertainty of filing for bankruptcy may leave you feeling anxious about the stability of your future. Understanding the impact that bankruptcy could have on your life, particularly your retirement benefits, may help you to make more confident decisions about how to proceed.
Being proactive about recovering from bankruptcy and taking the right steps to rebuild your credit may enable you to minimize the impact of your bankruptcy filing and optimize the resources you have to strengthen your financial foundation.
Protecting your retirement assets
According to The Motley Fool, the development of the Employment Retirement Income Security Act (ERISA) provides people like you with a degree of protection for your retirement assets if you are experiencing financial hardships. However, this does not mean complete protection for all of your retirement assets.
Contributions to your 401K or IRA accounts and the money held within the accounts are usually protected. However, any exemptions or withdrawals are no longer protected under the ERISA. If withdrawn, your funds may go toward paying down your debts. Experts recommend keeping your money in your retirement accounts and to refrain from withdrawing anything during the bankruptcy process.
Getting back on your feet
The sooner you implement solutions to boost your financial foundation, the faster you may recognize positive changes that will support your future. Even as your bankruptcy proceeds, consider setting a budget, minimizing unnecessary expenses, setting new financial goals and determining which steps may enable you to live financially secure despite your current situation. The more proactive you are about making needed changes, the sooner you may overcome the consequences of filing for bankruptcy.