Regional Acceptance Corporation, a Truist auto-finance affiliate, will close its Arlington office and lay off about 205 full-time employees in two rounds beginning around Nov. 30 and ending by Feb. 28, 2027, according to a WARN notice reported by Chron.
The closure is a significant blow to the local workforce, and it raises urgent questions about how affected workers will manage debt after losing a steady paycheck. Leinart Law Firm advises employees with credit card debt to review their options before withdrawing retirement savings to pay creditors, because those savings may be protected in bankruptcy.
Texas and federal law treat retirement savings differently from most other assets in a Chapter 7 bankruptcy case. Under Section 42.0021 of the Texas Property Code, employer retirement plans and individual retirement accounts are exempt from seizure for debts, whether vested or not. Federal bankruptcy law separately exempts funds in tax-exempt retirement accounts, so a 401(k) balance generally stays with the filer. That means creditors often cannot reach the money a worker might otherwise drain to pay bills.
Early withdrawals, however, are generally taxed as income, and a 10 percent additional tax may apply to distributions taken before age 59½. More importantly, a withdrawal used to pay credit cards or medical bills converts protected savings into payments on debts that a bankruptcy discharge might have eliminated.
Leaving funds in the employer plan or rolling them into an individual retirement account keeps the money protected while a worker weighs other options. Chapter 7 may discharge most unsecured balances, and a Chapter 13 repayment plan can give a household time to catch up on a vehicle loan or mortgage.
"Many people treat a 401(k) as the first source of money for debts after a job loss, yet it is often the account creditors are least able to reach," said Marcus Leinart, founder of Leinart Law Firm. "We review retirement balances, severance, and debts together before any money leaves the account, because a withdrawal can carry tax costs and forfeit protections a bankruptcy filing would preserve."
For the Arlington employees facing layoffs, the decisions they make in the coming months could determine whether they preserve a financial cushion or lose it to debt payments. The closure also underscores a broader reality for workers across Texas: retirement accounts are among the strongest assets to keep in a financial crisis, but only if they are left intact.
