Safeguarding your savings for retirement

[timm]

a question was asked in a tax preparing course,the best way to judgment proof your savings a elderly person 68 yrs old male living on company pension and social security( non working wage earner) to convert non-exempt assets (cash) into exempt assets (retirement funds) and to reflect an ongoing payment that will be allowed to reduce your disposable net income since company pension and social security pension is not considered income please correct me if i am wrong how is that possible?also this person is also contemplating bk at a later date. please chime in

[AngelinaCat]

Hi timm. Welcome to the forum. I moved your post from the end of that two year old thread, into one of it's own, where it is more likely to be seen and responded too.

Is your friend computer savvy at all? If so I invite him or her to sign up and ask questions. Sometimes it is difficult when there is a middle-man. I mean no offence; it just can be awkward.

[tobee43]

one can file bk anytime. we did with a pension and ss, which in this jurisdiction were considered exempt funds. however, as for our financial future AFTER the bk. if you want to die with a pocket full of money and live on tuna that's a personal chose. our choice was to get back into the market and begin investing again.

i would suggest as angelinacat has, have him join the forum. personally keep your exempt funds safe at all times. i think his/hers plan sounds fairly smart, however, he/she can't rush them all into exempt funds and file the next day, they are a bit smarter these bk courts.

[timm]

persons files bk in Indiana excluding the means test social security is counted as Current Monthly Income Calculation for bk 7 and 13 i do not believe the 7th court of appeals has ruled in favor of social security as a exemption in the northern district .the info i have is Should You Include Social Security Income as Part of the Current Monthly Income Calculation?

The Bankruptcy Code defines current monthly income as all the money you received for the six months before your bankruptcy divided by six. It is at this point that you will have to determine whether you should include your social security income in figuring out how much income you have received in the last six months. In most jurisdictions, you do not have to include it. But that is not the case in all courts.

Recently, the federal appellate courts in the Fourth, Fifth, Sixth, Eighth, and Tenth circuits have ruled that social security income should not be included. This means that if you live in Arkansas, Colorado, Iowa, Kansas, Kentucky, Louisiana, Maryland, Michigan, Mississippi, Missouri, Nebraska, New Mexico, North Carolina, North Dakota, Ohio, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, West Virginia, or Wyoming, you will not have to include social security payments when calculating your income.

Example. Say you received $1000 per month in income and $200 per month in social security in the six months before your Chapter 13 filing. If your social security income is not included in disposable income, then your average income would be $1,000 (not $1,2000). If your monthly expenses are $900, then your disposable income would be $100 ($1,000-$900), not $300 ($1,200-$900). any info update would be appreciated on a side note tuna has a lot of omega 3 (dha) good for the brain minus the mercury juicing the herb cilantro will detox from your liver now i just got the urge to eat a can of sardines

[tobee43]

we were in florida and didn't have to claim ss as income, however, it changed from county to county here. the same with pensions not ALL pensions are treated equally, only teacher, firemen and police are/where exempt when we filed. at our age it was a 13 or bust.

good thing i love spicy tuna rolls and love cilantro, only God would get me to eat sardines. beef also produces a special enzymes that heal the liver so have another martini with your steak.

[keepmine]

While SS is exempt from means testing, you still need to fill out schedules I and J {forward looking} to determine if there is enough monthly disposable income to fund a Chapter 13.

[timm]

in Indiana Northern district i agree keepmine also please look at tobee 43 remarks, but states like Texas allow state and federal ss exemption and 24 other states certain counties allow state exemption for social security not counted as income please convince me other wise! question! bankruptcy resident requirements for filing bankruptcy example Texas which has state and federal exemptions there are no resident requirements except homestead. even though 91 days is required for filing bk. some states require 180 days and others require 730 days for state exemptions and there is ohio you have be living there in order to file for state exemptions. 2005 new bk law require 730 days living in that state as a requirement for state bk exemptions but also in that bk bill they allowed states to decide state and federal exemption options as well as resident requirements please chime in

[tobee43]

keepmine, yes, this is true you must fill out your schedule I and J, however, they can take those exempt funds covering those costs and apply them towards your future expenses. yet they cannot be used to pay off debt either secured or unsecured, exclusion of course of certain types of liens may still be valid even with those exempt funds, and out live any bk; i. e. (drunk driver accident or such on that line).

however, under a (old) new provision of the bankruptcy law, enacted in october 2005, virtually all types of pension and retirement accounts recognized by the IRS are completely exempt regardless of what state you live in. the pension situation varies from state to state, for example where we filed it was exclusive to police, fire, and teachers pensions.

the exemption applies whether you rely on the list of federal bankruptcy exemptions (11 U.S.C. 522(d)(12)) or the exemption laws of your own state (see 11 U.S.C. 522(b)(3)(C)). section 522(b)(4) spells out the specific requirements for qualifying under these provisions.

these exemptions are unlimited, except for Roth and traditional IRAs, which are capped at an aggregate IRA account value of $1 million per individual (adjusted every three years for inflation). (see 11 U.S.C. 522(n))

SEP and SIMPLE IRAs, along with all other types of non-IRA retirement accounts such as 401(k)s and 403(b)s, are completely exempt.

timm: we left our state and moved to a more bk friendly state to file, however, had to wait the residency rule of 2 years to enjoy those exemption completely and that's exactly what we did.

[keepmine]

This question has been raised a few times over the years here.
This is one thread and Des does a job trying to explain the issue of SS.

http://www.bkforum.com/showthread.php?67570-Should-we-fight-the-courts-to-get-a-chapter-7-because-of-my-SS

Here's another one:

http://www.bkforum.com/showthread.php?47283-ss-income-not-counted

[tobee43]

i'm not seeing SSI really pertain in a no asset 7. i think what is covered by des most specifically are funding chapter 13's. i must stress we had no problem with the exemption of the funds, nor the pension. maybe is just the draw of the luck of your trustee.

[LadyInTheRed]

timm, your posts are very difficult to read. Please use proper punctuation so your sentences don't run on and use capital letters when beginning new sentences. Posting like you are sending a text message does not work when discussing legal issues.

[AngelinaCat]

timm, your posts are very difficult to read. Please use proper punctuation so your sentences don't run on and use capital letters when beginning new sentences. Posting like you are sending a text message does not work when discussing legal issues.

Nor can we read it. And frankly, I don't really have the time or eyestrain or patience to decipher a long run-on post. Sometimes I do edit posts, but I don't think the folks learn the lesson.

In this new age of thumbs only on text machines, and shortcut text messages, Lady is absolute correct: poor grammar, spelling, and text shortcuts, will not 'cut it' with any kind of legal situation.

[timm]

are you saying i have to go to bed without any supper

[chrisdfw]

You can't generally make retirement contributions without earned income and they can't exceed earned income.

There are other things that are exempt, but that is a state by state thing, in Texas annuities can be exempted, so that is a place to put money for some limited circumstances.