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I'm a personal gaurantor on my son's business loan? He's filing bankruptcy and has no assets. does it affect my 401k?

Virginia Beach, VA |

Also, i believe it's unconditional gaurantor. How does it affect my 401k and life insurance policy?

If it does? Is there a way to save it?

Attorney Answers 2


401K plans are protected by the Employee Retirement Income Security Act (ERISA). No one can touch those funds. Your insurance policy depends on state law. In Virginia, the value is subject to creditors. If it is a term policy, then your creditors will not be able to access any death benefits should anything ever happen to you.

[This communication is intended as general information and not specific legal advice, and this communication does not create an attorney-client relationship.]

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As someone who signed a personal guarantee on a loan, any assets that you own that are not protected by state law could eventually be taken to pay the debt. You will want to look at a copy of your states list of property that is "exempt" from creditors (often the term is called "execution," which is not what it sounds like!). Your state may have its laws posted online or the laws will be available at your public library.

Retirement accounts are protected by state law, but bank accounts, wages, and other assets may be taken or be subject to a lien. In most instances, the creditor will sue you first to obtain the right to seize your property.

I recommed that you get legal advice sooner rather than later! Good luck!

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