If you are going through bankruptcy pension income can be a primary concern. Many people who go through bankruptcy who receive pension realize that there can be some confusion as to how one affects the other. In fact, pension can go towards paying your debts on your bankruptcy plan. Keep reading about how a trustee might use your pension, what other effects bankruptcy will have on your payments and pension benefits, and what steps you need to take.
Assessing Your Pension as an Asset
You might be interested to know that pension can be considered an asset when it comes to a bankruptcy plan. Be aware that you could potentially lose any of your property or assets when it comes to your personal bankruptcy plan.
Your trustee is the person who is set up through the court system, appointed to take your through the bankruptcy process. He will help you pay off all of your debts and bills but do so at the expense of taking away your property if you have filed a Chapter 7. In truth, any wages (including pension and benefits) can be claimed to help pay off debts- however, your pension is generally a non-exempt asset and while income from it can be used to pay off bankruptcy, the pension itself cannot be seized or sold.
Determining Whether Pension Will Be Claimed by Your Trustee
You will have to provide information to your trustee about your pension so that they can determine if and how to include income from your pension in a repayment plan or as an asset. This might include information as to who your employers and pension programs are, your monthly and lump sum payments, and how much you have put into your pension.
However, you should know that if you have state pension or payments from a State Earnings Related Pension schemes, you won’t have to worry about losing these. These SERPA are protected and won’t be a part of your bankruptcy plan.
What Steps Do I Need To Take?
You might want to see if your pension is one that has been approved by what is called HMRC, or HM Revenue and Customs. You can accomplish this by speaking with your trustee and seeing if your pension is in fact qualified by HMRC. In this case, your trustee might not be able to claim your pension. There is also a time frame: if it is dated May 29 2000 or later, you have a better chance of keeping your pension – at least your payments, and perhaps not your benefits.
Get Legal Help
If you are concerned about your bankruptcy pension plan, consult with an experienced bankruptcy attorney as soon as you can. Your attorney can provide you with details about declaring bankruptcy and trying to protect your assets.
