Bankruptcy

questions & answers

Question: Does your (401K ERISA) remain exempt when filing BK7 if you pledged it as collateral to a private loan you made with someone?

Answer: If you file under Chapter 7, you may have to give up some property (although many filers keep most, if not all, of their property). This mostly depends on whether your property is exempt. If your property serves as collateral for a debt (such as your mortgage or car loan), there are other considerations. Refer to the following Arizona Statute pertaining to Chapter 7 exemptions

A.R.S. § 33- 1126(B)

Benefits from ERISA-qualified retirement plan or
deferred compensation plan except those amounts
contributed within 120 days before a debtor files for
bankruptcy. Does not apply to an alternate payee
under a qualified domestic relations order. Does not
apply to assets of bankruptcy proceedings filed before
July 1, 1987. Not exempt from orders resulting from a
judgment for child support arrearages or child support

For further information, see the following website:
http://www.uscourts.gov/services-forms/bankruptcy/bankruptcy-basics

Read the important warnings section carefully regarding legal advice. Contact an attorney for your specific situation.