I used my IRA to invest in stocks which is restricted and is not on the market yet, If i file chapter 7 can they touch my restricted stocks? I live in CA
Generally, retirement accounts are 100% exempt. By directing IRA funds to unqualified investments, you may putting your exemption at risk. If this comes to the attention of your Chapter 7 trustee, it could be a problem.
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If you left the funds in your IRA account then they would be fully exempt and not able to be touched by the chapter 7 trustee. Since you moved them into stocks this could pose a problem and the chapter 7 trustee may be able to sell them for the benefit of your creditors.
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The Chapter 7 Trustee will be capable of getting at any property you personally can get at, this includes stocks. Furthermore, you are required to specifically identify all stocks and bonds that you have invested, so the Chapter 7 Trustee will be fully aware of your stock interests. Depending on your circumstances, you may qualify to claim certain financial values associated with those stocks as exempt under the applicable State exemption statutes. When you have issues of this type, you really should be consulting with a qualified Bankruptcy Attorney in your area to make sure your personal property and stocks are protected to the greatest extent possible. The likelihood of losing those stocks skyrockets if you attempt to handle the bankruptcy on your own rather than using an experienced Attorney.
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