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Elizabeth Prentice
Elizabeth Prentice, Attorney
Category: Bankruptcy Law
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Experience:  Managing Attorney for one of the largest consumer bankruptcy firms in America.
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can anyone tell me what federal law protects a 401k against

Resolved Question:

can anyone tell me what federal law protects a 401k against creditors? something like

U.S.C..sections...
Submitted: 1 year ago.
Category: Bankruptcy Law
Expert:  Elizabeth Prentice replied 1 year ago.
I am a bankruptcy attorney and I would be happy to assist you. In Texas the code which will protect a person's 401k from creditors is Tex. Prop. Code Ann. § 42.0021. You can find the Texas personal property protected from creditors here, which includes the aforementioned code:
http://www.statutes.legis.state.tx.us/Docs/PR/htm/PR.42.htm

The federal laws which protect all types of retirement funds and accounts that are tax-exempt under Internal Revenue Code (IRC) section 401, 403, 408, 408A, 414, 457, or 501(a), as well as IRAs & Roth IRAs limited to $1,245,475 (excluding rollover contributions) is 11 U.S.C. § 522(d)(12) and 11 U.S.C. § 522(n).

I hope my answer has assisted you and that you will leave me a positive rating! If you have any questions in the future, please feel free to ask for me by name.
Customer: replied 1 year ago.


ok thanks, XXXXX XXXXX ask because my friend is going thru a divorce here in Texas, and his attorney told him that his ex cant touch his 401k because it was a retirement account. so im thinking this law is the reason why.

Expert:  Elizabeth Prentice replied 1 year ago.
Definitely. That 401k remains protected under Texas and Federal law. Please remember to rate my answer so I may receive credit. It has been a pleasure to assist you!
Customer: replied 1 year ago.


i hope so, but i thought most judges ignore the state and federal laws and divide up a 401k like any other savings account?


 


well thats what i have read some about..

Expert:  Elizabeth Prentice replied 1 year ago.

To clarify, a creditor can not touch a 401k under Texas and Federal law. You asked this question in the bankruptcy forum relating to creditors. Now when discussing family law, Texas is a community property state. A spouse in a divorce is not a creditor under the prior statutes. They are spouse entitled to community property. Texas Code Sec. 3.002 states that Community property consists of the property, other than separate property, acquired by either spouse during marriage. Therefore, a spouse can be subject to 1/2 of any 401k monies acquired during a marriage, or in the alternative the judge can separate assets as they see fit. I hope my answer has assisted you and that you will now rate my answer. Please do not reply thanking me, as the system will prevent you from rating it by doing so. Your rating is all the thanks I need, for thoroughly answer all of your questions. If you have further questions, please feel free to post again in a forum. Thank you for using JustAnswer.

Customer: replied 1 year ago.


if you had 40k in a 401k before marriage and were contributing 25% the whole time, then dropped your contributions down to 7% after marriage and after 3yrs of marriage your 401k was valued at 140k. how would you know how much was from the seperate property and how much was from the community property? is there a special type of person who knows how to calculate such things to the exact amounts? if so who would? financial planner? accountant? etc?

Expert:  Elizabeth Prentice replied 1 year ago.
As you are aware, you are only permitted to ask one question. Although you have asked multiple questions, I have answered them thoroughly and correctly. Therefore, please rate my answer. If you wish to ask family law questions, you will need to ask a new question in the family law forum. Please make sure you now properly rate my answer, as I have answered all of your bankruptcy statutory questions relating to debt. Thank you for your compliance.
Elizabeth Prentice, Attorney
Category: Bankruptcy Law
Satisfied Customers: 170
Experience: Managing Attorney for one of the largest consumer bankruptcy firms in America.
Elizabeth Prentice and 4 other Bankruptcy Law Specialists are ready to help you

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