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lukom17762
Guest
can a collection seize my ira roth account?.
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I AM ALWAYS LIABLE
Senior Member
lukom17762 said:
My response:
No, they cannot. Your retirement funds are excluded from writs of attachment, and are safe from collection or other judgments. The purpose is clear; retirement funds are to keep people from becoming a burden to society at time of their retirement.
IAAL
ShyCat
Senior Member
I fear that I must disagree with IAAL.
Defined contribution retirement accounts governed by ERISA, i.e., 401(k) and 403(b) accounts, are protected from creditors. IRAs, on the other hand, are governed by state law and are not universally protected. Some states protect IRAs, while others do not or only provide partial protection (for example, protecting only IRA balances up to $1M).
I seem to have lost my link to a website that included a chart with this information for each state. I'll look for it....
Defined contribution retirement accounts governed by ERISA, i.e., 401(k) and 403(b) accounts, are protected from creditors. IRAs, on the other hand, are governed by state law and are not universally protected. Some states protect IRAs, while others do not or only provide partial protection (for example, protecting only IRA balances up to $1M).
I seem to have lost my link to a website that included a chart with this information for each state. I'll look for it....
I AM ALWAYS LIABLE
Senior Member
My response:
Since our writer failed to specify standard / ordinary IRA versus the newer Roth IRA, the presumption is that our writer has an ordinary IRA - which is protected.
So, it's not serious if state legislatures act quickly to subject Roth IRAs to the same creditor protection as ordinary IRAs. And there is no reason to suspect that won't be the case. In the short run, lack of creditor protection may be a non-issue even with Roth IRA's. But if state legislatures do fail to act, it will undoubtedly discourage many conversions to the Roth IRA.
IAAL
Since our writer failed to specify standard / ordinary IRA versus the newer Roth IRA, the presumption is that our writer has an ordinary IRA - which is protected.
So, it's not serious if state legislatures act quickly to subject Roth IRAs to the same creditor protection as ordinary IRAs. And there is no reason to suspect that won't be the case. In the short run, lack of creditor protection may be a non-issue even with Roth IRA's. But if state legislatures do fail to act, it will undoubtedly discourage many conversions to the Roth IRA.
IAAL