A personal finance blog dedicated discussing such topics as budgeting, asset allocation, 401K, IRA, cash flow, insurance, financial planning, portfolio management, and other areas in personal finance.


Tuesday, April 05, 2005

IRAs are Now Protected from Creditors

The Supreme Court ruled that IRAs cannot be seized by creditors in bankruptcy proceedings. What the ruling didn't say though, is whether or not large IRAs would be protected. The bankruptcy code says that certain assets "reasonably necessary" to support the debtor and any dependents may be protected from creditors. To me, this leaves the door open to raiding a large IRA if need be.

Up until now, IRA protection was left up to the individual states, which varied widely.