Will I lose my retirement if I file for bankruptcy?

Your Pension, IRA, and 401k are protected in bankruptcy in the State of Illinois. When the bankruptcy laws were written, lawmakers wanted to make sure to protect people's retirment plans. However, they must be properly 'exempted' on Schedule C of your bankruptcy schedules in order to be protected. Also, your retirmenet plan must be an acutal retirement plan like a pension, IRA, 401k, etc. You cannot protect a regular savings account, for example, and declare that your intention was always to put that away for retirment. In that case, it would be treated as any other bank account which most people will protect using their "wildcard' exemption of $4,000 in Illinois. 

Retirmenet plans are their own category of assets with its own special section of the law which protects it.  There are many, many 'categories' of property in bankruptcy, all of which make up the bankruptcy estate. And for each item you own, a determination must be made as to whether or not it can be protected and if so, how much. This should be looked at before you file and certainly before determininig which chapter of bankruptcy you wish to be filing under.  Bankruptcy laws are very complex. If you are considering filing, give us a call at 630 250-8813 for our Itasca location or 630 250-8809 for Schaumburg. We'd be glad to help. 

Carol O'Connor Cadiz
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Attorney & Owner at O'Connor Cadiz Law: Bankruptcy, Injury, Real Estate & Mediation