IRA Bankruptcy Protection - $1,512,350

Your IRA Retirement Account is Protected

Fortunately, virtually all ERISA-qualified retirement accounts and pension plan funds are excluded from bankruptcy.  The 2005 amendments to the US Bankruptcy Code permit a debtor to protect a $1,512,350 in his/her IRA. 

Fully-Protected Retirement Accounts

Congress amended the US Bankruptcy Code in 2005 to protect an unlimited amount in any retirement fund that is exempt from taxation (think 401k, 403b, Keoghs, Profit-Sharing Plans, and Defined-Benefit Plans).

Withdrawn Retirement Funds Lose Protection

Any money taken out of a retirement account loses its protection.  Worse, those withdrawn funds will be considered as income and figured into your Chapter 7 means test qualification.

The Bottom Line

You can use the bankruptcy exemptions (522(d)(12) to protect over a million dollars in your retirement account. Park It. Don’t spend it. File bankruptcy and erase your debt.  An experienced bankruptcy attorney can guide you through the process and make sure your rights are protected. It’s free to chat with me about your options – you can call or text me at 215.551.7109, or drop me a line.