are individual retirement accounts exempt in chapter 7 bankruptcy?
2 Answers from Attorneys
There are exemptions both under the Federal and State exemptions in Minnesota for IRAs and 401Ks. The state exemptions have some dollar limits, but they are relatively high.
The most important thing you should know, however, is that retirement accounts are usually not part of the bankruptcy estate. That means that the trustee can't have them even if they are not claimed as exempt.
The bankruptcy estate is the pot of assets which the trustee in a Chapter 7 tries to put together and out of which the trustee is supposed to pay something to the creditors. I consider it my job to make sure that pot stays empty if that's at all possible.
This response is for general information purposes only, does not create an attorney-client relationship and is not legal advice. Please consult the attorney of your choice concerning the details of your case.
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