The short answer is no. People often assume filing bankruptcy means the system will take a 401(k) or IRA to repay debts, but the truth is the law safeguards 401(k) plans and IRAs along with just about everything most people in northern California have as necessities of life.
This includes union pensions, 401(k)s, 403(b)s and IRAs. For IRAs (including Roth IRAs) the protection is limited to just over 1.5 million per person. If you have more than 1.5 million in your retirement accounts bankruptcy may not be the best choice for you. This limit is adjusted every three years to account for increases in the cost of living.
A word of caution, once money is withdrawn from a 401(k) or an IRA it will no longer be considered retirement, and for that reason will be treated differently which is not necessarily a problem. If you are considering withdrawing money from a 401(k) or an IRA to resolve debts issues, you should consult a bankruptcy attorney. Often bankruptcy will forgive debts while allowing a person to keep their retirement.
At the Law Office of Michael Primus, we have helped hundreds of clients get out of debt, stop wage garnishments, and start fresh through bankruptcy. If you live in Contra Costa County and have debt problems, contact us for a free consultation. Offices in Walnut Creek, Antioch and Hercules.