Bankruptcy is a legal federal petition meant to keep your creditors from confiscating or repossessing your assets, including, but not limited to:
- A home (protect from foreclosure)
- A business (allow to reorganize and continue functioning)
- An income (protect from a wage garnishment)
- A vehicle (protect from repossession)
Assets that are already partially or completely protected from creditors even without bankruptcy* typically include:
- Retirement investments, particularly company-sponsored plans like a 401(k)
- Social security benefits
- Disability benefits
- Unemployment benefits
- Veterans Administration income
- Individual Retirement Accounts (up to an amount “reasonably necessary” to support the IRA owner and dependents)
- Child support or alimony
- Federal Railroad benefits (retirement, unemployment, sickness)
- Federal and Civil Service Retirement System benefits
*Meet with legal counsel to get individual advice
The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) requires all individuals or couples filing for personal bankruptcy filers (typically Chapters 7 and 13) to meet with an approved nonprofit credit counseling agency for a budget briefing prior to filing their petition with the court. Find more details here.
