Charlotte, NC asked in Bankruptcy for North Carolina

Q: Hello I did speak with an attorney and was told IRA's are exempt.

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2 Lawyer Answers
Clark Dray
Clark Dray
Answered
  • Bankruptcy Lawyer
  • Broomfield, CO

A: I believe that this question stems from an earlier one about whether you should move money from your bank account to an IRA prior to filing bankruptcy. There is no question that funds held in an IRA are subject to both federal and state exemptions. My point was that the act of converting a non-exempt asset into an exempt asset immediately prior to bankruptcy can be considered a form of fraud. As such, you need to hire a good bankruptcy lawyer who can properly advise you about asset protection strategies because the specifics are beyond the scope of a forum like this.

1 user found this answer helpful

Timothy Denison
Timothy Denison
Answered
  • Bankruptcy Lawyer
  • Louisville, KY

A: IRAs are exempt but you transferring cash to an IRA prior to filing could be viewed as fraud and the trustee could void the transfer and possibly take the money.

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