Increasingly, older Americans are considering bankruptcy as a way of shielding their assets, shedding their liabilities, and confronting a financial reality that is fraught with rising health care costs and likely tax hikes. Fortunately, the Supreme Court has made their financial lives a little more secure in one important way: protecting their retirements from the long reach of creditors.
In a recent decision, Rousey v. Jacoway, the Supreme Court concluded that Individual Retirement Accounts (IRAs) fall within the protections of the Bankruptcy Code’s exemption scheme. Crucially, IRAs are contracts “on account of age.” As a result, these financial accounts are analogous to pensions and, consequently, operate under the umbrella of Section 522 of the Code.
In financial terms, the protection of this umbrella is important for millions of American debtors. On average, American workers keep more than $50,000 in IRA accounts. Thanks to Rousey and, later, BAPCPA, these dollars stay with workers retirees, giving these Americans a capital reserve necessary to pay expenses and prepare for the future.
Which of your retirement accounts are most safe? Does the value of your retirement account exceed the protected amount? Are you concerned that your non-traditional IRA may not receive the same treatment under the Bankruptcy Code?
These are important questions. Fortunately, the attorneys at the law firm of Fears Nachawati are prepared to help you learn and understand the answer. With years of experience helping bankruptcy debtors, we know how to fight for you. To find out what your next steps should include, talk to our professionals today.