Retirement accounts are protected by the Employee Retirement Income Security Act (ERISA) both in a bankruptcy filing Chapter 7 or 13 and are therefore not considered a collateral when creditors come after your assets. Specific exemptions for IRS qualified plans fall in this category: Pensions, 401(k) and 403 (b) are exempt regardless of its value whereas traditional or Roth IRA’s are only exempt up to $1,095,000 per person.

If you have lost your job and need to roll over your 401(k) or 403 (b) into an IRA, you may do so regardless of the amount you are rolling over. The new IRA will then be protected under bankruptcy law.

However, any new funds you add to your retirement account within six months of filing for bankruptcy will not be protected by law from creditors. This is also true for any sum of money you may receive such as lottery winnings or a lawsuit settlement. Since these moneys are normally considered to be non exempt assets, the law will not allow you to contribute them to your retirement account so to protect from creditors.