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> you declare bankruptcy and the hospital ends up paying for all except the few dollars they are able to get out of you. Does that mean the entirety of your li
by ebg13 7y ago
> you declare bankruptcy and the hospital ends up paying for all except the few dollars they are able to get out of you.
Does that mean the entirety of your life savings and any liquidatable assets?
- lovich 7y agoIts complicated, there are usually certain assets you can keep in bankruptcy in the US like your primary residence
- Merrill 7y ago401Ks, IRAs and other retirement plans are usually protected unless the creditor is the Federal government, e.g. the IRS or the Department of Education.
- dsfyu404ed 7y agoCombined with state bankruptcy protections practice this means that most middle class people who don't have tons of money in a bank account, a home that is not their primary residence (or in their primary residence above whatever value their state protects) are decently protected but the upper middle class who often does have those things loses them in bankruptcy.
- ebg13 7y ago> 401Ks, IRAs and other retirement plans What about non-retirement investments? Aren't you only allowed to put so much into a retirement plan per year?
- Merrill 7y agoNon-retirement investments are subject to seizure to pay creditors. Yes, retirement accounts are limited in terms of annual contributions. But bankruptcy protection is one factor to consider in whether to max your contributions and/or to pay ahead on the mortgage on your primary residence.
- SketchySeaBeast 7y agoThat's incredibly depressing that there is a whole class of people who are doing perfectly fine, can even afford to pay ahead their mortgage or their retirement plans if they want, that are one illness, with all it's impossibly insurmountable debt, away from bankruptcy.