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   Supreme Court: Creditors Can't Seize IRAs

NEWS INFORMATION

Parent

Parent

News Date

4/4/2005 12:00 pm

Author

Media

Yahoo News: Iran

Category

Legal Ruling

Database Record

Entered 4/4/2005, Updated 4/4/2005

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WASHINGTON - The Supreme Court on Monday ruled that creditors may not seize Individual Retirement Accounts when people file for bankruptcy, giving protection to a nest egg relied upon by millions of Americans. The unanimous decision sides with a bankrupt Arkansas couple fighting to keep more than $55,000 in retirement savings. As a result, IRAs now join pensions, 401(k)s, Social Security and other benefits tied to age, illness or disability that are afforded protection under bankruptcy law. IRAs should not be treated any differently because the benefits are tied to people's age, the court said, citing a substantial tax penalty that is imposed for withdrawals before a person turns 60.


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