IRA Held Non-Exempt In Bankruptcy

[pdf] (standardagents.com): ". . . [M]onies inside IRAs do not have ERISA protection from claims of creditors. ERISA protects the accounts of employer-sponsored plans; IRAs are by definition individual plans. This is not new information and most of our readers are aware of it, but a recent bankruptcy case, In re Richard Rousey, decided by the 8th Circuit bankruptcy Appellate Panel reminds us to continue counseling clients on this important issue."

IRA and Bankruptcy

(prosperitypartnering.com): "Had these taxpayers kept their funds in their pension plans, they would have been exempt from creditors. It appears that the taxpayers chose to fall under the exemption of federal law as opposed to state law. . . . The moral of the story remains the same however: 'Look Before you Leap.' (And get some expert advice)."

TaxProf Discussion of Rousey v. Jacoway

(TaxProf Blog): "Yesterday's grant of certiorari by the U.S. Supreme Court in Rousey v. Jacoway (No. 03-1407), blogged here, sparked a spirited dicussion on the TaxProf Discussion Group over whether federal bankruptcy law should protect IRAs from creditors. Greg Germain (Syracuse) and Tom Allington (Indiana-Indianapolis) were two of the most vocal participants and they have agreed to allow TaxProf Blog to share their views with the broader tax community here."

High court to hear Arkansas couple’s IRA case

(nwanews.com): "Federal law allows people in bankruptcy to keep payments under pensions, company stock bonuses or similar plans that are to be received 'on account of illness, disability, death, age or length of service.'
But the St. Louis-based 8 th U.S. Circuit Court of Appeals ruled in the Rouseys’ case that IRAs aren’t covered by that exemption. When people withdraw IRA money early, subject to a tax penalty, those payments aren’t made on account of age, the appeals court said."

Justices to consider IRAs during bankruptcy cases

(HoustonChronicle.com): "The Supreme Court said Monday it would consider whether people facing bankruptcy can prevent certain retirement savings from being used to pay their debts.
Bankruptcy law protects payments from a person's pensions and annuities, but does not mention Individual Retirement Accounts, which are at issue in a case involving an Arkansas couple."