Non-assignable Assets

• Your 401(k) plan assets cannot be assigned in Oklahoma since 401(k) plans are subject to federal laws. The Employee Retirement Income Security Act (ERISA) prevents companies from taking money from your retirement accounts, but it also prevents your retirement accounts from being garnished, assigned or transferred to another individual or business in most cases.
  
  

Significance

• The money must stay in your 401(k) plan for the protections under ERISA. The money in your 401(k) is considered to be in a trust. This means the money is held for your future benefit. Because of this, neither your creditors nor creditors of your employer will get the money in your 401(k) plan account.
  
  

Limits

• When you withdraw money from your account, you lose the protections afforded to you under ERISA. If you start making withdrawals from your 401(k) plan, the court must be notified and you may end up paying a portion of your 401(k) income to your creditors. This will depend entirely on the circumstances of your bankruptcy and how much must be repaid to your creditors. If your assets are already liquidated under Chapter 7, then the remainder of the debt is charged off and you owe no further payments to any creditors.
  
  

Consideration

• You shouldn't hide any assets from the bankruptcy court. Consider deferring withdrawals from your 401(k), if possible. Retiring while you're still making payments under Chapter 13 could prevent you from living the retirement you want. Since payments generally last for five years under a bankruptcy debt reorganization, you should consider working for another five years to finish the repayment so you get your full retirement savings.