Q. In a bankruptcy situation, will the 403(b) come under attack or will other creditors be able to attach these 403(b) funds. The client has approximately $86,000 in 403(b) assets. How are 403(b) assets handled in a bankruptcy?
A. The Bankruptcy Protections Act extended bankruptcy protection to 403(b) plans (as well as other retirement plans, and IRAs); thus, the client’s 403(b) assets are protected in the event of the client’s bankruptcy since creditors cannot attach them.