Charlotte Bankruptcy Lawyer Bryan W. Stone of Arnold & Smith, PLLC answers the question “Are my 401k and IRA protected in bankruptcy?”
A recent article in the Detroit News discussed the case of an attorney who had to advise a client not to file for bankruptcy despite a massive $400,000 mountain of debt. The reason? Because the man had recently inherited an IRA from his deceased mother. According to a recent U.S. Supreme Court case, the money contained in the IRA would not be protected during the bankruptcy process and would instead be forfeited to pay off creditors. Given the certain loss of the money, the man decided to avoid filing and continue struggling under an impossible debt burden.