Facing the prospect of having assets turned over for liquidation is a common hang up Escondido residents may have about filing for bankruptcy. However, this fear is oftentimes the result of one of the many myths that surround a Chapter 7 bankruptcy filing. The reality is that many assets are exempt from being included as part of the bankruptcy legal process.
Retirement savings, for example, are one type of asset that will typically be exempt from bankruptcy liquidation. However, as with most things, there are exceptions to this rule. Certain types of retirement savings accounts may not qualify for an exemption, so Escondido residents who have concerns over whether or not their account would qualify will probably need to seek more information about their own unique situation.
Why are retirement savings oftentimes exempt from bankruptcy proceedings? Well, it makes sense if one thinks of the other things that are usually exempt from bankruptcy, such as the tools of one’s trade and a personal vehicle. Bankruptcy is not designed to strip people of everything they own. On the contrary, bankruptcy is a consumer device that allows people to address their debt concerns and get a fresh start on their finances.
Courts recognize that many forms of retirement savings are put away in an account and never touched. Escondido residents who have concerns over the possible inclusion of their retirement savings in a bankruptcy action may be able to put those concerns behind them by seeking legal help from an experienced attorney.