For debtors facing financial distress in the twilight of their working years or beyond, bankruptcy’s promised fresh start may depend more on preserving retirement assets and benefits than returning to economic productivity. Even for those in the prime of their working years, losing retirement assets can represent a major lifelong setback. As a result, the question of whether consumer debtors can keep all or part of their retirement assets and benefits is a critical consideration. This paper surveys the intersection between the Bankruptcy Code and the preservation of retirement assets and benefits before and after the 2005 amendments to the Code. It highlights the changes that broadened protection for such assets, and it considers questions that still remain unanswered ten years after BAPCPA’s enactment.
Included in this paper are discussions of not only the exclusion or exemption of retirement funds, but also the treatment for disposable income purposes of Social Security as well as retirement contributions and loan repayments.
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