A lot of people who have filed for bankruptcy are not aware of the effect that it has on your retirement funds if you have borrowed against it. This article will try to answer your apprehension regarding the loan from the retirement plan in the case when you are filing for bankruptcy. No doubt by now you already know you can borrow money from your retirement plan. Depending the variety of bankruptcy you are filing (Chapter 7 or Chapter 13 bankruptcy), it changes the consequence of the loan you have against the retirement plan.
If you have filed for Chapter 7 bankruptcy protection, your loan from the retirement plan will NOT be discharged. You will still have to pay yourself back (into the retirement plan) at the end of the bankruptcy. Chapter 7 bankruptcy code allows you to discharge debt or loans that you owe to other people, but a loan to yourself is not considered "owing to other people". You will still have to pay yourself back in full post bankruptcy.
Chapter 13 works in a different way in which you will generally pay off your debt in installment, with the chance of a much lowered outstanding balance. When the pre-arranged debt is paid off in full, you will be discharged through Chapter 13 bankruptcy. The determination to discharge the loan from the retirement plan is made by the bankruptcy court when you are filing for Chapter 13 bankruptcy. The bankruptcy court has to determine if you have disposable income that you can use for your repayment into the retirement plan. The bankruptcy court largely will allow the loan to be discharged if you have minimal savings and you are close to the retirement age.
How does automatic stay apply to the loan against my retirement plan?
No matter if you are filing under Chapter 7 or Chapter 13 bankruptcy, you will be given by law the statute of automatic stay. Automatic stay is where no creditors can contact you, or harass you for payment until the case is dealt with inside the court of law. It is not possible to employ the statute of automatic stay to not repay the loan you have taken out from the retirement plan. The legal definition of automatic stay requires that the creditors must stop pursuing your debt when you have file for bankruptcy protection. But if you have a loan from the retirement plan, it is borrowing from yourself, so there is no creditor involved. Therefore you cannot use the automatic stay statute to stop repaying your retirement loan during the bankruptcy process, even though the loan might be eventually discharged through Chapter 13 bankruptcy.
Selasa, 22 Agustus 2017
Kamis, 03 Agustus 2017
Company Retirement Plans - Help Your Employees Plan For and Make the Transition
We often think of retirement as "the golden years." It can be--for those who have planned well for the social, emotional, physical, and financial changes that take place. Those who fail to plan may find that the gold is brass.
As the first wave of baby boomers approach their mid-60s, retirement has become an increasingly important issue. Unlike their parents, this new breed of senior citizen can expect at least 15 to 20 years or more of relatively healthy retirement or even another career. With the cost of pensions and health care, companies are restructuring their retirement plans to programs that put more responsibility on the worker and less on the corporation. This is why you should keep your employees informed about their retirement benefits and help those nearing retirement age prepare for the transition.
Start early
Mention retirement benefits to all new hires, regardless of age. One way to get younger employees to start planning for retirement is to tie the planning into their current priorities. For instance, if your company offers a 401(k) program, promote it as a way to save for later years while also reducing current tax liability.
Keep the communication channels open
If you contribute to a 401(k) or other retirement program, remind employees regularly that you are setting money aside for their future. If employees don't remember that their retirement benefits are valuable, the benefits themselves won't fulfill one of their main purposes, which is rewarding employees for staying with the organization. Use a variety of communication channels, including the company newsletter, special mailings, e-mail announcements, the company intranet, and announcements at staff meetings. Any improvements in the plan should be officially announced in a written document distributed to all employees.
Pre-retirement seminars
While it's important for all employees to be aware of the retirement benefits you offer, it's even more important for older employees to understand exactly what that means for them. Consider offering pre-retirement seminars to help employees prepare well in advance, as much as 15 or 20 years. Get them to think about where they're going to live, sources of income, what to do with their time, the possibility of starting a new career, and so on.
Ease the transition
In addition to helping employees prepare for retirement, help them make the transition itself. Consider offering the option of scaling back work schedules as staffers near retirement. Almost-retirees may work 30 hours a week for several months, then drop to 20 for a while before actually leaving the company.
You might also ask retirees to return to work as temporaries or to cover during peak periods. This is entirely up to the individual, of course, but it gives them an opportunity for productive work and lets the company benefit for their years of accrued knowledge and experience.
Retirement benefits are valuable, and simply reminding employees of them can ensure that they're perceived as valuable. Pre-retirement planning shows that your organization really cares about its employees, and workers of any age appreciate that.
As the first wave of baby boomers approach their mid-60s, retirement has become an increasingly important issue. Unlike their parents, this new breed of senior citizen can expect at least 15 to 20 years or more of relatively healthy retirement or even another career. With the cost of pensions and health care, companies are restructuring their retirement plans to programs that put more responsibility on the worker and less on the corporation. This is why you should keep your employees informed about their retirement benefits and help those nearing retirement age prepare for the transition.
Start early
Mention retirement benefits to all new hires, regardless of age. One way to get younger employees to start planning for retirement is to tie the planning into their current priorities. For instance, if your company offers a 401(k) program, promote it as a way to save for later years while also reducing current tax liability.
Keep the communication channels open
If you contribute to a 401(k) or other retirement program, remind employees regularly that you are setting money aside for their future. If employees don't remember that their retirement benefits are valuable, the benefits themselves won't fulfill one of their main purposes, which is rewarding employees for staying with the organization. Use a variety of communication channels, including the company newsletter, special mailings, e-mail announcements, the company intranet, and announcements at staff meetings. Any improvements in the plan should be officially announced in a written document distributed to all employees.
Pre-retirement seminars
While it's important for all employees to be aware of the retirement benefits you offer, it's even more important for older employees to understand exactly what that means for them. Consider offering pre-retirement seminars to help employees prepare well in advance, as much as 15 or 20 years. Get them to think about where they're going to live, sources of income, what to do with their time, the possibility of starting a new career, and so on.
Ease the transition
In addition to helping employees prepare for retirement, help them make the transition itself. Consider offering the option of scaling back work schedules as staffers near retirement. Almost-retirees may work 30 hours a week for several months, then drop to 20 for a while before actually leaving the company.
You might also ask retirees to return to work as temporaries or to cover during peak periods. This is entirely up to the individual, of course, but it gives them an opportunity for productive work and lets the company benefit for their years of accrued knowledge and experience.
Retirement benefits are valuable, and simply reminding employees of them can ensure that they're perceived as valuable. Pre-retirement planning shows that your organization really cares about its employees, and workers of any age appreciate that.
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