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Ask WALLSTREETESQ Your Own Question
Category: Bankruptcy Law
Satisfied Customers: 17080
Experience:  14 years exp., CH 7 AND 13 Bankruptcy cases, AFL-CIO UNION PLUS, UFT NYSID AND ALL MAJOR UNIONS
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My husband and I filed Ch. 7 bankruptcy in MN in Sept 2009.

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My husband and I filed Ch. 7 bankruptcy in MN in Sept 2009. We received our discharge letter in Jan 2010. I have money in an exempt retirement plan from my former employer (both my husband and I are currently unemployed). Can I pull this money out of my retirement plan in April 2010 to buy a new place to live without any repercussions related to our bankruptcy? Once we are past 180 days from our filing date am I ok to cash this out or can the trustee come back after this? There is no gain on the amount reported in bankruptcy as this is in a low risk IRA account with very small return. My concern is converting this protected asset to cash even though we are "done" with the bankruptcy. Also, if I use this money for building matterials to build a house, can the trustee/court come back to get any equity, or is this all outside of the bankruptcy scope.
did you list retirement plan in your bankruptcy as an exempt asset?
Customer: replied 6 years ago.
Yes. It was listed as an ERISA Compliant retirement fund.
since you are not trying to defraud any creditor as you listed them as an exempt asset, you will have no issue in regards XXXXX XXXXX that money from the accounts, as that it what it is for. The only time I have seen an issue is if you created the IRA few months prior to your filing and hid your assets into it, and then withdrew your money after, it could be considered fraud.

Edited by k. paturi on 3/3/2010 at 9:31 PM EST
Customer: replied 6 years ago.
One other thing. We listed the retirement accounts as exempt under the Federal Exemptions in Minnesota. We didn't use our individual exemptions for them, but the standard 522 (B)(3)(c) exemption for retirement accounts.
that is fine the federal exemption protect IRA accounts and their distributions fully.
Customer: replied 6 years ago.
Even for early distributions, if we pay the early withdrawal penalty? Since we are not retirement age, but are going to use that money to get our family into a new home (we lost the other one in foreclosure and hence the reason for the bankruptcy).
yes, the IRA is protected, their is no law in the bankruptcy code that forces individuals to wait for retirement to withdraw, the fact is that you will be paying taxes on it, and the bankruptcy discharged your debts so they would not even know anyway.
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