I am considering bankruptcy. I am self employed. I have an IRA that I inherited. Will I lose that?

Asked over 1 year ago - Tullahoma, TN

I am going to lose my means of supporting myself and my 2 minor children. I may possibly lose our home that was my mother's and we are living in. If they take the IRA of which I receive a monthly check I will have no way to support us. Can that be exempt from the proceedings?

Additional information

Are there not a cetain amount of exemptions that are allowed for myself and for my 2 children? I've spoken with a lawyer who is trying to save the my mother's home based on the equity I personally have in it. But, my fear is they won't be able to and I will have to find a place to live with no money to do so.

Attorney answers (4)

  1. Danielle M. Callahan

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    Contributor Level 12

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    Answered . I would suggest you consult with a bankruptcy attorney in your area. Depending on the laws of your state, these items MAY be exempt from the bankruptcy estate. In Massachusetts, IRAs that match ERISA qualifications are exempt from the bankruptcy estate. Also depending on the exemptions of your state (and ALL are vastly different), your house may be protected as well. I'd HIGHLY recommend consulting with a bankruptcy attorney. Many bankruptcy attorneys offer free consultations, and you may want to consider starting there. Best of luck to you.

    My responses to questions on Avvo or other internet sites are never intended as legal advice and must not be... more
  2. Ted A Troutman

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    Contributor Level 12

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    Lawyers agree

    Answered . If the IRA is a qualified retirement account it should be exempt and the trustee will not be able to take it. You should meet with a qualified bankruptcy attorney to go over your whole situation and to make sure the IRA will be exempt.

    The answer above is for general information purposes only. You should talk to an attorney to determine your... more
  3. Robert Thomas Demarco III

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    Contributor Level 7

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    Answered . PLEASE consult with a LOCAL bankruptcy lawyer. The answers posted are too general. The issues is not the exemption of a IRA, but the exemption of an INHERITED IRA. An inherited IRA may be VERY different from an IRA you establish for yourself.

    Please review this case in Google Scholar: In re Chilton, 426 B.R. 612 (Bankr. E.D.Tex. 2010). This case is from the Bankruptcy Court I practice in. This opinion was subsequently overruled by the District Court. Nonetheless, it does show that the issues is not as obvious as one might perceive.

  4. Diane L Gruber

    Pro

    Contributor Level 18

    Answered . IRAs are fully protected (exempt) under the bankruptcy code. Meet with a BK attorney to discuss ALL the issues. Good luck.

    Be sure to designate "best answer." If you live in Oregon, you may call me for more detailed advice, 503-650-9662.... more

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