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Can IRA accounts be taken in a judgment?

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    Can IRA accounts be taken in a judgment?

    Out of the blue, I went from being a millionaire to losing it all and an additional likely $500k business debt judgment against me and have no means to pay and will have to file Chap. 7. My state (NV) has a $1 mil IRA exemption. But if I do not file Chap. 7 and decided to live judgment proof, can the creditor with the judgment seize my 20k IRA account? (it is a Roth IRA and a Keogh IRA)

    #2
    That would depend on what protections you have in Nevada for Roth or Keogh IRAs.

    See https://www.leg.state.nv.us/NRS/NRS-021.html#NRS021Sec090"]Nev. Rev. Stat. §21.090(1)(r)[/URL]. The overall exemption appears to be limited to $500,000, in present value, held in an IRA that conforms with Sec. 408 or 408A. The code reads as follows;

    An individual retirement arrangement which conforms with or is maintained pursuant to the applicable limitations and requirements of section 408 or 408A of the Internal Revenue Code, 26 U.S.C. §§ 408 and 408A, including, without limitation, an inherited individual retirement arrangement;
    If your Roth and/or Keogh complies with section 408A, then they are likely protected in Nevada (from execution).

    You should probably go speak with an asset protection attorney to gauge the specific issues for protecting, of all things, retirement assets in your State. Nevada is one of the few States that protect 408A retirement accounts (like Roth IRAs), so you have some advantage there. I just don't know the extent or whether Keogh's are included in those protections from execution.
    Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
    Status: (Auto) Discharged and Closed! 5/10
    Visit My BKForum Blog: justbroke's Blog


    I am not an attorney. Any advice provided is not legal advice.

    Comment


      #3
      thank you justbroke. Your name is too understating of the situation as if it is not a big deal. Being broke was my biggest fear in life. I went from millionaire to broke in 1 day. It took over 30 years to get the million. Now my life is over. I am too old to start over. The creditor will now chase me and make my life even more miserable. I don't know why more don't take the ultimate check out option.

      Comment


        #4
        Trying to convey your current state of mind and financial status is hard to do in a screen name on a Website. I think "just broke" explains it when people ask me why I filed bankruptcy... "I'm just (plain) broke."

        Life happens and challenges us in different ways. Financial challenges are not the end of the world, although they may feel like a death sentence. I discharged over $1,000,000 of real estate and never felt better... after the fact. During the stressful period of dealing with creditors, robbing my future to try to stay afloat (raiding the 401(k)), just seemed impossible.

        Bankruptcy will keep your creditor, whoever this creditor may be, at bay and from bothering you (period). Bankruptcy is a very powerful tool that allows the debtor to startover with a clean slate... a fresh start.
        Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
        Status: (Auto) Discharged and Closed! 5/10
        Visit My BKForum Blog: justbroke's Blog


        I am not an attorney. Any advice provided is not legal advice.

        Comment


          #5
          You mentioned it is an INHERITED IRA. Alaska, Arizona, Florida, Missouri, North Carolina, Ohio and Texas are the only states where nonspousal inherited IRAs are safe from trustees seeking assets in the settlement of bankruptcy cases. Even in those states it is tricky.

          Basically it was argued in Federal court they shouldn’t be exempt because you can take money out any time, for what ever you want.

          I am dealing with that issue. I do live in Florida, but need to wait until I have been here 2 years to file. I was going to go CH 7, however after FINALLY finding a lawyer that was experienced with them, I was advised to go CH 13 because apparently you can’t you can’t get out of CH7 if it looks like things are going bad.

          I have had sleepless nights over this as it is all I have. Talked to asset protection lawyers and many bankruptcy lawyers, most of which I had to give them the Florida statute. So be very careful.

          Comment


            #6
            Sorry, Somehow I misread the post so disregard. Shows how stressed I am, I see a certain word and my mind jumps to this nightmare..

            Comment

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