Can I Contribute To My Retirement Account During A Bankruptcy?

The ability to contribute to a retirement account during a bankruptcy, particularly a Chapter 13 bankruptcy, varies from jurisdiction to jurisdiction, as the Bankruptcy Code does not contain any specific provisions regarding retirement contributions. There are exceptions, of course. Mandatory contributions to a pension fund are allowed, as they are part of your employment/union agreement. Chapter 13 cases that provide for a 100% distribution to all creditors generally do not prohibit voluntary retirement contributions. For all other voluntary contributions to 401(k)s, 403(b)s, Thrift Savings Plans and IRAs, there are four positions that courts generally take:

Of course you can. Some courts will allow you to maximize your contributions to retirement accounts during your bankruptcy case. Their reasoning is basically that bankruptcy is designed to provide you with a fresh start and put you into a position to succeed financially after your discharge. Nothing supports future success like a properly funded retirement account.
Of course you can, but only up to a certain percentage. Some courts will allow you to voluntarily contribute to your retirement accounts, but only up to a certain percentage, often tied to the amount that your employer matches. These courts are balancing the interests between your fresh start and maximizing the distribution to creditors.
Of course you can, but only if you were doing so consistently prior to your bankruptcy filing. These courts look to your prior contributions and, if they are not recent and consistent, will not allow you to start contributing to your voluntary retirement accounts at the expense of your creditors.
No. There are a few courts out there who walk a hard line. Retirement contributions that are voluntary are not necessary for an effective reorganization and would be direct detriment to your creditors, so you are not allowed to contribute. Thankfully these courts are not in the majority.

I appreciate that this is a vague answer, but to get a more specific answer in your jurisdiction you will need to consult with a local experienced bankruptcy attorney. This is one of the areas of bankruptcy governed by local practice, so you need a local expert.

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