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Andrea Ray
Andrea Ray, Attorney
Category: Bankruptcy Law
Satisfied Customers: 82
Experience:  Over 5 years experience in consumer and commercial bankruptcy law, Chapters 7 13 and 11
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If I qualify and file a Chpt. 7 personal BK, what happens to my small sep IRA acct.&a

Customer Question

I'm pretty sure based on taxable income, that I would qualify for a Chpt. 7 BK. If I have a meager retirement acct....$20,000
with a securities company (Sep/Roth IRA)..would I lose this? Also, if I listed my children on the account with me...would this keep the courts from taking the small retirement acct. I have tried to save? Please advise....thanks.
Submitted: 8 years ago.
Category: Bankruptcy Law
Expert:  Andrea Ray replied 8 years ago.
Retirement funds are exempt under the bankruptcy exemption statute, 11 USC 522 (b)(3). Your retirement fund is safe as long as it's in the retirement account. No need to list your children.
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Customer: replied 8 years ago.
To further clarify....I am self employed, no 401K with an employer...I have my own investments placed in a Sep & Roth....maybe I need to contact my Financial advisor to cover all of my bases, but if he takez the money from these accts and then re invests them into stocks, mutual funds. it still untouchable?
Expert:  Andrea Ray replied 8 years ago.
No, they have to stay in a retirement plan that is listed in the code ((12) Retirement funds to the extent that those funds are in a fund or account that is exempt from taxation under section 401, 403, 408, 408A, 414, 457 or 501(a) of the Internal Revenue Code of 1986.)

I would not be moving anything around if you are thinking about filing for bankruptcy. You don't want to be accused of trying to evade your creditors, or you could be denied a discharge.