The Supreme Court has held that retirement plans that have a legally enforceable "anti-alienation clause" (which is a provision preventing creditors from attaching the retirement funds of a debtor) are not property of the bankruptcy estate and therefore are not subject to the jurisdiction of the bankruptcy court
. Therefore, creditors cannot come after these funds in bankruptcy.
Nearly all pensions
and 401K savings plans that are qualified under ERISA (which is a federal law regarding pensions) have an anti-alienation clause that excludes them from the bankruptcy estate.
Even in the unlikely event that your 401(k) does not have an anti-alienation clause. Many courts have held that private retirement accounts, including IRA's are also exempt in bankruptcy. So there is a very good chance your retirement funds will be protected.
There are some different rules that may apply if your retirement account has over $1 million in it, but that is not usually an issue for most people.
Therefore, you should not withdraw or borrow against your retirement funds if you think you may be seeking bankruptcy protection
soon. Since those accounts are protected, you should leave them alone since they will survive your bankruptcy.
I hope this helps!
Please keep in mind that information in this forum is for informational purposes only. It is not legal advice and does not constitute creation of an attorney client relationship. Before acting on any such information, you are always advised to consult with an attorney licensed to practice in your jurisdiction who can take the time to review all the facts and laws relevant to your situation.