A natural concern for many who are considering bankruptcy is the impact on retirement funds, investment portfolios, pensions and other paper assets.
As an experienced Colorado Springs bankruptcy lawyer, Stephen H. Swift is committed to assisting consumers struggling with debt. Whether a failing business, medical bills, credit card debt or foreclosure, the nation’s bankruptcy laws are a powerful tool that puts consumers firmly back in control of their lives.
Whether investments are protected depends somewhat on whether a consumer is filing Chapter 13 bankruptcy, sometimes called a reorganization bankruptcy, or whether a Chapter 7 bankruptcy is the best option. Chapter 7 is a liquidation bankruptcy.
Chapter 7 v. Chapter 13 Bankruptcy and Your Investments
Generally, your investments will be protected when filing for Chapter 13 bankruptcy in Colorado. With this filing, you develop a repayment plan, which will last 3 to 5 years. Payments are based on disposable income and some debts may be forgiven at the conclusion of the payment plan.
Chapter 13 bankruptcy in Colorado Springs is typically used by filers who have large assets, such as homes or brokerage accounts, that they want to protect from seizure.
With a Chapter 7 bankruptcy, or liquidation bankruptcy, assets may be seized and sold. The proceeds are distributed to creditors in exchange for forgiveness of most debt. This is the most popular form of bankruptcy and “liquidation” is a bit of a misnomer. Many assets, like cars and houses, may be saved through permitted exemptions. And often the filer has few assets worth protecting.
The truth of the matter is that far too many consumers tap 401k plans, IRAs and other protected assets long before they seek the assistance of an experienced Colorado bankruptcy attorney. Not only are they paying debts with assets that would otherwise be protected, they are jeopardizing their long-term financial well-being as part of a losing strategy to stave off creditors.
Many types of investment or retirement accounts are also protected via Chapter 7, including:
- 401k plans
- IRAs
- Pension Plans
- Disability Benefits
- Personal Injury settlements
- Social Security benefits
- Tax-sheltered college savings plans
- Retirement annuities
- Life insurance
- Assets in business partnerships
While an unprotected brokerage account could be subject to forfeiture in Chapter 7 bankruptcy, careful planning with the assistance of an experienced Colorado Springs bankruptcy attorney can help protect your assets. Each case is unique and an experienced attorney can advise you about the best course of action.
In many cases, dealing with bad debt, upside down mortgages, high credit card balances or insurmountable medical bills can help a client regain solid financial footing. Even when doing so results in the forfeiture of certain assets, it can be the best decision when it comes to protecting your financial future.
If you are dealing with debt, contact the Law Office of Stephen H. Swift for a free initial consultation to discuss your situation, your rights and whether bankruptcy may be right for you. Serving clients in in Colorado Springs, Pueblo, Denver and the surrounding area.
Colorado Springs bankruptcy – 866-893-2440 or 719-520-0164 – legal consultation
