September 10, 2017
BACKGROUND:
Retirement accounts are exempt when you file bankruptcy.
You are able to keep your retirement accounts and protect your future.
Debtor filed for Chapter 7 Bankruptcy
Debtor withdrew $130,000.00 from his IRA (did not rollover the funds into another Retirement Account) after petition was filed but before case was closed.
Trustee filed an action to recover the withdrawn funds.
COURT RULING
- Court initially held Debtors must turn over the $130,000 withdrawn from their IRA post-petition.
- Court reversed its ruling holding that in a Chapter 7 case, where the time to object to exemption has expired, Debtors can withdraw from their IRA without the Trustee being able to claw-back the funds for creditors.
It is important to hire a Board Certified NJ Bankruptcy Attorney when you file for Bankruptcy to protect you from claw-backs.
