Today, fewer and fewer people are saving much for their retirement. Whether it is generational differences, economic recessions, or a mix of both, planning for the future has taken a backseat to day-to-day survival.
For the generation that has already entered retirement, times are even tougher. What took a lifetime to save can be whittled away quickly as health, housing, and living costs rise steadily. Many seniors in Arizona are facing economic hardship, but most shy away from the idea of bankruptcy for fear of losing everything in their retirement accounts in an effort to escape debt.
The good news is that retirees’ pension and retirements funds are almost all exempt from creditors in an Arizona bankruptcy. Accounts like a 410(k), profit-sharing plans, Keoghs, and several others have unlimited exemption amounts, meaning that no matter how much money is saved in these plans, every cent will be protected from creditors in bankruptcy.
Both traditional and ROTH IRAs are also exempt, up to a certain amount. These accounts are currently protected up to $1,245,475 per individual, and any excess amount beyond that will be applied to repay debt.
When it comes to qualifying for bankruptcy, retirees will be evaluated very similarly to anyone else. Instead of standard income being measured, retirement benefits are counted as income. The amount received will determine if the individual qualifies for a Chapter 7 bankruptcy, or how much he or she will be expected to pay in a Chapter 13 repayment schedule.
If you are a retiree in Arizona struggling with debt, you do not need to live your life under a burden of that magnitude. The Arizona bankruptcy attorneys at Curry, Pearson & Wooten are here to help you take control of your finances and bid creditors adieu—call us now at 602-258-1000 to speak with an experienced bankruptcy lawyer today.