Times are getting exceptionally tough, financially for many people, and many are feeling that their options for financial protection are becoming increasingly limited as credit continues to dry. Many are way past due on their mortgage, collection agencies are calling daily to get their money, and the future is looking increasingly bleak - financially. Many people feel that the only way out is to file foreclosure, however, there is a concern about the assets that you could lose by following through with this process. A question that comes to mind is if your 401k will be protected in bankruptcy.
Rest ashore, your 401k is not affected by bankruptcy. While creditors can access your other assets to liquidate so that they can cover their lost - The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 - which was effective on October 17, 2005 - prevents them from accessing your 401k investments.
