Exemption of Pensions in Florida Bankruptcies

Anyone who is considering a personal bankruptcy filing in South Florida may be concerned about their retirement accounts or pensions. This is particularly true for adults who have been working for many years or decades and are now making the decision to file for bankruptcy. Whether you are considering a Chapter 7 bankruptcy and concerned about your pension or retirement account being liquidated, or you are filing for Chapter 13 bankruptcy and are trying to understand if your retirement funds will count toward your current assets, it is important to be clear: most pensions and retirement accounts are exempt in bankruptcy cases.

The Florida Statutes expressly exempt a range of pensions for public employees, and debtors who work for private employers are also commonly able to exempt all of the assets in their retirement accounts. Being able to exempt pensions and retirement accounts is particularly important for debtors whose assets are primarily held in those types of accounts, and who want to be able to retire without significant complications after a bankruptcy filing. Our West Palm Beach bankruptcy attorneys can explain these exemptions in more detail.

State Retirement System Benefits

Various types of employees in Florida have pensions through the state retirement system, including state and county officers, state and county employees, and teachers. These benefits are exempt under the Florida statutes.

Pensions for Firefighters and Municipal Police

Firefighter and municipal police pensions are exempt under the Florida Statutes.

Public Employee Retirement Benefits

Other types of public employees in Florida are also eligible to exempt their public employee retirement benefits according to the Florida Statutes. To find out if you are classified as a public employee in Florida (and thus if your retirement benefits are exempt under this portion of the Florida Statutes), you can discuss details with a Florida bankruptcy lawyer.

Tax-Exempt Retirement Accounts for All Employees

In addition to the pension and retirement account exemptions that are expressly available for certain types of employees in Florida as discussed above, most employees will also be able to exempt their tax-exempt pensions or retirement accounts, up to the amount identified as exempt under federal law. Through March 31, 2028, the exempt amount is $1,711,975 per person. That exemption amount applies to a wide range of retirement accounts, including but not limited to:

• 401(k) accounts;
• 403(b) accounts;
• Simplified Employee Pension (SEP) plans, or SEP-IRAs;
• Savings Incentive Match PLan for Employees, or SIMPLE IRAs;
• Traditional IRAs; and
• Roth IRAs.

If you have any questions about other types of retirement accounts, you should discuss the details with a bankruptcy attorney in West Palm Beach.

Contact a West Palm Beach Bankruptcy Attorney Today

Do you have questions about personal bankruptcy in general, or specific questions about how pensions or retirement accounts are treated in Florida bankruptcy cases? You should get in touch with an attorney as soon as you can. One of the experienced West Palm Beach bankruptcy lawyers at Kelley Kaplan & Eller can answer any questions you have today, and we are here to start working with you on the details of your bankruptcy case. Contact us to find out more about the bankruptcy services we provide in South Florida.

Sources:

leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&Search_String=&URL=0200-0299/0222/Sections/0222.21.html

law.cornell.edu/uscode/text/11/522

irs.gov/retirement-plans/plan-sponsor/simple-ira-plan