Legal Question in Credit and Debt Law in California

Re: Debt: 401k & ira funds

Whew - you covered a lot of ground in your post. I'll do my best to answer your questions, but given the nature of this forum its going to be tough. You've got a lot going on, and a consultation with an attorney is probably appropriate. First, Visa and medical establishments are creditors, not debtors - you are the debtor in that you owe the money. As a very general rule, properly established retirement plans can be exempt from attachment by your creditors UNTIL such time as a distribution is made. The money distributed from the retirement account into your bank account can be subject to attachment. So, in theory the bank could continuously lien your regular bank accounts, and each time a check comes in, the creditor could take it. Between that and other collection techniquest, you need a solution other than just trying to dodge them forever. You can always attempt to negotiate your obligations with any or all of your creditors, the question is will they work with you. Given the current upheaval in the credit markets, I can't answer that question, but you'll probably want or need assistance with this process. As for the Homestead, no it does not delay a foreclosure and the subsequent eviction. The Homestead simply exempts from attachment by creditors (except your mortgage holder) a certain amount of equity in your home. That prevents people like your Visa creditor from attaching a lien on your home, and then foreclosing on their lien (unless you have more equity than the allowed exemption in California). As for foreclosure, the Homestead will have absolutely no effect on a foreclosure and the subsequent eviction. Bankruptcy would almost certainly help you protect your retirement accounts, possibly help you avoid foreclosure on your home and eliminate any chance of the other creditors from attaching your other assets like household furnishings, vehicles, etc... I strongly encourage you to meet with a Bankruptcy attorney before you make any more decisions.

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