Will the bankruptcy effect my CDs, 401k's, and Roth's?

Answer by  cynosure (376)

If your account is exempt from federal taxation (401K, IRA), then the bankruptcy should not affect it - it will pass through, assuming it was not created in a fraudulent attempt to shield assets from creditors. If the account is taxable (CD), then it should be deemed property of the estate, and will be used to remunerate creditors.

Answer by  flamiss22 (5081)

In a bankruptcy when your debt is discharged all your assets will be taken into consideration. So there is a possibility your savings will be affected.

Answer by  junebug0720 (270)

Your CDs, 401k's and Roth accounts are fine if you file bankruptcy. It is best not to tap into these before they are matured or you are at retirement age.

Answer by  worker2746 (2434)

Bankruptcy will take into account any and all assets that you have. You may well be forced to liquidate some of your assets in order to pay for your bankruptcy filing. Your CDs are not exempt from the filing, and your 401K and Roths' should get sold first before filing.

Answer by  tamarawilhite (17883)

When you declare bankruptcy, money in retirement accounts cannot be taken unless you moved money into them recently to avoid having to pay debts. However, money put into retirement counts more than 12 months prior is untouched. Certificates of Deposit at banks can be required to be cashed out and used to pay off debts.