Certain retirement plans, pensions, employee benefit accounts, and spendthrift trusts can be exempted from the debtor's estate when filing for bankruptcy. Most plans and accounts that fall under the Employee Retirement Income Security Act (ERISA) are exempted from falling into a debtor’s estate when filing for bankruptcy. Certain other plans and accounts that are non-ERISA plans that also stay exempt from filing for bankruptcy include pensions from religious organizations and governmental entities. Additional plans that are excluded from ERISA as well as religious and governmental entities may also be exempted from the debtor’s estate, so long as they abide under § 541(b)(7) of the United States Bankruptcy Code or abide under specific state laws. Michigan’s bankruptcy laws exempt most pension and retirement accounts, but any amounts contributed to those pensions and accounts within the 120 days prior to filing for bankruptcy will not be exempt.
To better understand if filing for bankruptcy is the right action for you, it is recommended you set up an appointment with a local bankruptcy attorney.
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