Filing for bankruptcy in the state of California wipes your credit slate clean from credit card debt, personal loans and medical bills. Before you get to the point of filing bankruptcy, you have probably had a slew of calls from creditors threatening leans on any and all assets including retirement plans. The fact is that in bankruptcy, the federal and state governments realize that an individual must have a certain set of assets available to move forward; your retirement assets are one of them.
Instructions
- 1
Hire a bankruptcy attorney. Review the benefits of the various forms of bankruptcy: Chapter 7 or 13.
Chapter 7 liquidates personal nonexempt property to pay creditors.
Chapter 13 allows the debtor to retain assets and pay creditors over three to five years.
Review the benefits of choosing either the Uniform Federal exemptions in bankruptcy or the California Civil Procedure Code Section 704. California allows bankruptcy filers to choose and gain certain exemptions for properties such as cars or special assets. For those concerned only about preserving 401k assets, either set of laws do so upon election.
3Declare your 401k as an asset exempt under either the federal or state provisions.
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