by 
The Curious Bag
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One of the ultimate goals of seeking bankruptcy protection is to attempt to protect as many of your assets as possible. If you contemplate filing for bankruptcy, you may wonder whether federal retirement annuities are safe from being applied to debt through bankruptcy.
Exemptions
Under federal and state law, certain types of assets are protected in a bankruptcy case.
Types
The types of assets that are protected from creditors in bankruptcy include a personal residence, a reasonably priced personal automobile, tools of the trade and different types of retirement plans--including federal retirement annuities.
Considerations
The rationale behind protecting federal retirement annuities and other similar retirement plans for creditors is to ensure that a debtor has appropriate income during retirement.
Misconceptions
A common misconception associated with bankruptcy is that a debtor is stripped of all of her assets.
Warning
Bankruptcy cases are complicated and many times challenging. Your best interests likely are better served if you hire an experienced bankruptcy attorney to represent your interests.
Famous Ties
Although an exception to the normal rule, Bernie Madoff, the king of the Ponzi scheme, is to be stripped of a good deal of his retirement money in his bankruptcy case. Facing a 100-plus year federal prison sentence, he likely has no need for retirement funds.
Source:
"The Glannon Guide to Bankruptcy: Guide to Bankruptcy;" Nathalie Martin; 2006
Cornell Law School: Bankruptcy Overview
More Information:
American Bar Association: Bankruptcy & Insolvency Litigation Committee
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