In the State of Rhode Island, most retirement/pension plans are protected 100%. When filing a Chapter 7 Bankruptcy a Debtor must be very careful that all of his or her assets are protected under some applicable State or Federal Law. When filing for Bankruptcy you must declare all of your assets and what they are currently worth. You want to make sure that you report everything very accurately to your bankruptcy attorney so that you do not find out too late that you are losing your future income that you thought was protected from creditors.
Many people , and attorneys, do not always understand that once you file for Chapter 7 relief that everything you own at the time of filing becomes the property of your “bankruptcy estate”. As such, if the property is not “protected” the Trustee assigned to your case may take it, sell it and distribute unprotected net sale proceeds to your creditors. That is why it is so important to retain competent legal counsel, like Pitts & Burns, who is thoroughly familiar with the ever changing and complex Bankruptcy Laws. Most people have between $40,000.00 and $70,000.00 in unsecured debt when they file for Bankruptcy. Therefore if your Bankruptcy is done correctly you receive an enormous amount of relief. With that said, all lawyers are not created equally, and the selection of the right attorney to represent you should not be based on the cheapest price. The wrong attorney, or thinking you can represent yourself, can cost you far more than what competent counsel would have cost.
Every asset you own most likely has a specific law that protects it, but in many cases not for the full value. Fortunately, so long as your pension/retirement plan is a qualified plan pursuant to the IRS regulations, it will be preserved.