The U.S. population is aging, and many Americans who have high debts also have significant savings beyond Social Security set aside for their retirements. The question many of them ask is, What happens to these accounts in Las Vegas bankruptcy? Here are seven things to know:

(1) For the most part, retirement savings are protected from bankruptcy. However the law protects specific assets.

(2) For example, employer pension plans and union pension plans are not considered part of the bankruptcy estate. This is because they are not your assets, even if you are the ultimate beneficiary.

(3) Elsewhere the bankruptcy code enforces restrictions on the transfers of debtors’ beneficial interests in a trust account if such restrictions are enforceable outside the bankruptcy code. In practice this means that retirement plans and trusts that contain enforceable alienation clauses are similarly shielded in bankruptcy, meaning they cannot by even be included in the bankruptcy estate to begin with.

(4) If that’s not enough for debtors, Individual Retirement Accounts (IRAs), which are largely governed by 26 U.S.C. § 408, are subject to a more than $1,000,000 federal exemption by 11 U.S.C. § 522(d)12. A similar exemption exists in § 522(d)12(E) that protects retirement funds that are exempt from taxation, including 401(k) accounts.

(5) Under Nevada law, all federal income tax exempt accounts, including IRAs, 401(k)’s, etc. are exempt up to $500,000.

(6) Obviously there’s some redundancy in how retirement accounts are protected from the bankruptcy trustee. In some cases debtors can claim that retirement accounts are not a part of the bankruptcy estate, in others they can claim that the accounts are a part of the bankruptcy estate but are exempt.

(7) Finally—and most importantly—simply claiming a savings account is meant for a debtor’s “retirement” does not exclude it or exempt it from the bankruptcy estate. The money must be placed in a specific income tax exempt account.

Most debtors can rest easier knowing that their retirement savings can’t be used to pay off creditors, but it’s also important because it helps debtors develop strategies for dealing with large debts even when they have significant savings set aside for retirement. This is why it’s important to talk to a Las Vegas bankruptcy lawyer when you are having problems with your debts.

For more questions about bankruptcy in Las Vegas, please feel free to contact an experienced Freedom Law Firm Las Vegas bankruptcy attorney for a free initial consultation. Call us at 1-702-803-9251 to set up your free consultation.