Many individuals facing substantial debt see filing for bankruptcy as a last resort. Though many may be unwilling to consider bankruptcy initially, it can provide an opportunity for a fresh financial start. One of the most important steps is determining whether filing for Chapter 13 or Chapter 7 bankruptcy is right for you.
If you're thinking about bankruptcy, don't stop your 401 contributions
When it gets difficult to pay your bills, you'll start looking for ways to bring home more cash. A common way people try to do this is to stop or lower their 401k contributions. Don't change your contributions to a 401k or any other employer-sponsored retirement plan without talking to a qualified bankruptcy attorney first. While in most instances you can keep contributing money after filing bankruptcy, you might not be allowed to start a new contribution during your bankruptcy. For some Chapter 13 debtors, this means you cannot start a new 401k contribution for 3-5 years. Confusing? Don't worry. We can help you to understand the effect of bankruptcy on your retirement accounts and other assets during a free consultation
