You made responsible choices and contributed to a retirement account, and now that nest egg has grown significantly. Don’t worry about losing your retirement savings in bankruptcy, because it’s exempt. Under North Carolina exemptions, all IRS qualified retirement accounts (employer pensions, 401(k)’s, Traditional IRA’s, Roth IRA, etc.) can’t be touched by the bankruptcy court.
If you are a state or municipal employee, those retirement benefits are exempt too. This also applies to retirement accounts from the federal government, as well as other states and their municipalities.
If you haven’t filed bankruptcy yet, but are considering withdrawing from your retirement benefits to pay down debt, please call me first. Many times this just delays the time before you end up filing bankruptcy, except now you’ve spent your retirement funds. Funds you would have kept had you filed bankruptcy first.
Every dollar that you spend from an exempt source is a dollar that you could have otherwise kept after filing bankruptcy. The sooner you file bankruptcy, the sooner you will stop making payments on old debts that are keeping you from getting a fresh start.