I was attending my bankruptcy hearing and the trustee suddently said that there is a new law just got pass to allow IRA to be a collateral of some kind. So, if I default on a loan, the creditor can take my IRA - has anyone heard about this new law? Can you point me to it? and Also what kind of literature will talk about it? My trustee want me to produce a document of my traditional IRA to see if there ia clause in there that talks about using IRA as a collateral of some kind. My lawyer and I are both very confuse. Help. I have a deadline to meet.
Contact the trustee and ask for a cite. Virginia exempts IRAs from creditors. I am not aware of any federal law that changes this. If there is, it would severely alter IRAs and retirement.
Mr. Goldstein is a Virginia-licensed attorney only. The information is not, nor is it intended to be, legal advice. You should consult an attorney for individual advice regarding your own situation. Answering this question does not in any way constitute legal representation. Contacting Mitchell Goldstein or the Goldstein Law Group does not constitute legal representation, nor is any information you provide protected by attorney-client privilege until otherwise advised.
I don't know about any new law unless it is in MI but I do know the IRS can place a lien on an IRA or retirement account and use it as collateral.
I am not your attorney and am not giving legal advice.
Let your attorney take the lead in finding out what exactly the trustee wants. He or she can find out exactly what law the trustee was talking about and whether it applies to your specific situation. The federal exemptions allow most people to protect the entire balance they have in their retirement accounts. Is the trustee going to try and force you to borrow against your IRA to pay creditors? Your attorney should get the request in writing from the trustee and you can go from there.
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