Bankruptcy Law

Bankruptcy Law Questions? Ask a Bankruptcy Lawyer.

Ask a Lawyer,
Get an Answer ASAP!

Bankruptcy Law
This answer was rated:

You answered a question on Jan 23. I just follow up with with

another question. I am suing the...
You answered a question on Jan 23. I just follow up with with another question.
I am suing the defendant for breaching business contract and fraud. If I prevail in court and get a judgement to seize his properties, according to my understnading, I can go after the real-estate and businesss the defendant owns.
What about defendant's IRA account or other retirement type of account. For example, if the defendant intentionally hide his assets after the lawsuit was filed, he may only left with his retirement asset because he has to pay high tax if the does a lump sum withdraw. Can one file for bankruptcy while having quite some asset in IRA or other retirement? I know his social security is fully protected by law. But I am not sure how the retirement asset are protected.
Show More
Show Less
Ask Your Own Bankruptcy Law Question
Answered in 5 hours by:
2/3/2013
TJ, Esq.
TJ, Esq., Attorney
Category: Bankruptcy Law
Satisfied Customers: 12,555
Experience: JD, MBA
Verified
Hello and thank you for allowing me the opportunity to assist you.

ERISA accounts are generally exempted in their entirety. The IRA is exempt up to a certain point. There is no specific amount. Instead, the law allows the debtor to exempt the amount necessary to provide for support in retirement. The botXXXXX XXXXXne is that a judge determines what that amount is on a case by case basis.

However, if the debtor files for bankruptcy, then like an ERISA account, the entire IRA can be exempted per the Bankruptcy Code regardless of how much is in it. Unfortunately, this would likely mean that if you stood a reasonable chance at getting at the IRA, then the debtor would likely file for bankruptcy.

I am truly sorry to give you this bad news, but please understand that it would be unfair to you (and unprofessional of me) to provide you with anything less than an honest response. However, if your concerns were not satisfactorily addressed, then please let me know, and I will be happy to clarify my answer. Please remember to rate me based upon whether I answered your question, and not upon whether the answer was good news or bad news. Your positive feedback is greatly appreciated.

Thank you and good luck!
Ask Your Own Bankruptcy Law Question
Customer reply replied 4 years ago


Thanks. What ERISA means here. I guess it includes the whole life insurance(with investment), and annuity etc.

 

I am assuming how this defendant act as follows. Could you help me understand how he is able to file for bankruptcy or hide his asset and protect his IRA or other retirement assets?

 

I assume that besides his IRA and other retirement asset, he started with net assets of 2 millions. This includes his business assets, real-estate, bank saving etc. After the lawsuit was filed, he started to transfer his non-retirement asset away, or sold those assets to liquidate or did re-refinancing (on real-estate) to take money out of real-estate. After the judgement arrived, he then files for bankruptcy.

Here I am not sure if he meets the criteria to file bankruptcy. His behavior shows his intentional fraud and intentionally tranferred his asset to avoid judgement. I heard if he did that, he violated the law of avoiding judgement transfer. If bankruptcy can protect him regardless, it does not matter how many judgements (i.e the judgement of loss initial lawsuit and judgement of transferring away asset after the initial lawsuit started) he will be facing.

 

Generally speaking, if a person committed financial fraud or scam, it seems his retirement fund can be protected even if he goes to jail. For example, Madoff can keep his retirement assets even if he committed scam and fraud and in jail. Is that understaning correct?

Hi again.

Q: What ERISA means here. I guess it includes the whole life insurance(with investment), and annuity etc.

 

I am assuming how this defendant act as follows. Could you help me understand how he is able to file for bankruptcy or hide his asset and protect his IRA or other retirement assets?

A: The answer is in Section 522(b)(3)(c) of the Bankruptcy Code, which exempts "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"

 

So basically, if the annuity or IRA is covered under those sections of the Internal Revenue Code, then it is exempt per the Bankruptcy Code that I cited, and, unfortunately, he can keep it after filing for bankruptcy. You can review the Internal Revenue Code here: CLICK HERE.

 

Q: After the lawsuit was filed, he started to transfer his non-retirement asset away, or sold those assets to liquidate or did re-refinancing (on real-estate) to take money out of real-estate. After the judgement arrived, he then files for bankruptcy.

A: That is considered a fraudulent transfer. First and foremost, you can take action and ask the judge to reverse the transfers. Even if you do nothing, however, the bankruptcy trustee would never let him get away with it. The bankruptcy trustee will reverse the transfer himself once the bankruptcy is filed, so long as the transfer occurred within 2 years of when the bankruptcy is filed. If actual fraud is proved, then the bankruptcy trustee can go after the assets even if more than 2 years have passed. And there's no doubt that the bankruptcy trustee would do it because they are paid a percentage of the assets that they recover for the bankruptcy estate (i.e., for creditors).

 

Q: Generally speaking, if a person committed financial fraud or scam, it seems his retirement fund can be protected even if he goes to jail. For example, Madoff can keep his retirement assets even if he committed scam and fraud and in jail. Is that understaning correct?

A: It depends. If the retirement account was funded with money obtained by fraudulent means, then it can be attacked. But if the retirement account was funded legitimately, then it is likely safe.

Ask Your Own Bankruptcy Law Question
Customer reply replied 4 years ago

Thank. That answered my questions. Just one more thing. I heard if he re-financed his real-estate after he knows the lawsuit, the mortgage holder will have the priority to seize the real-estate even if the defendant's re-financing action is a kind of fraudulent transfer ( I think that is for the purpose of avoiding judgement). But there is no way to prevend this from happening before the judgement and the plaintiff has no way to recover damage caused by this action(?).

Hi again.

When you talk about refinancing, I am assuming you're referring to a situation in which the defendant in the lawsuit refinances to get at equity in the property. In that scenario, the refinancing would not be a fraudulent transfer because the mortgage lender is giving the defendant money in exchange for the bigger lien. In other words, the defendant is not transferring his assets ... rather, he is just converting his assets from one form to another (i.e., from real estate to cash). What he does with the cash could be considered fraudulent, of course.

TJ, Esq.
TJ, Esq., Attorney
Category: Bankruptcy Law
Satisfied Customers: 12,555
Experience: JD, MBA
Verified
TJ, Esq. and 87 other Bankruptcy Law Specialists are ready to help you
Ask your own question now
Ask TJ, Esq. Your Own Question
TJ, Esq.
TJ, Esq.
TJ, Esq., Attorney
Category: Bankruptcy Law
Satisfied Customers: 12,555
12,555 Satisfied Customers
Experience: JD, MBA

TJ, Esq. is online now

A new question is answered every 9 seconds

How JustAnswer works:

  • Ask an ExpertExperts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional AnswerVia email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction GuaranteeRate the answer you receive.

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

Mr. Kaplun clearly had an exceptional understanding of the issue and was able to explain it concisely. I would recommend JustAnswer to anyone. Great service that lives up to its promises!

Gary B.Edmond, OK

My Expert was fast and seemed to have the answer to my taser question at the tips of her fingers. Communication was excellent. I left feeling confident in her answer.

EricRedwood City, CA

I am very pleased with JustAnswer as a place to go for divorce or criminal law knowledge and insight.

MichaelWichita, KS

PaulMJD helped me with questions I had regarding an urgent legal matter. His answers were excellent.

Three H.Houston, TX

Anne was extremely helpful. Her information put me in the right direction for action that kept me legal, possible saving me a ton of money in the future. Thank you again, Anne!!

ElaineAtlanta, GA

It worked great. I had the facts and I presented them to my ex-landlord and she folded and returned my deposit. The 50 bucks I spent with you solved my problem.

TonyApopka, FL

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help.

Mary C.Freshfield, Liverpool, UK

< Previous | Next >

Meet the Experts:

Terry L.

Terry L.

Attorney

2,679 satisfied customers

Better Business Bureau. 18yrs bankruptcy experience. Chicago Bar Assoc. American Bankruptcy Institute member.

cortrightlaw

cortrightlaw

Attorney

511 satisfied customers

Attorney practicing Bankruptcy Law including Chapter 7, Chapter 11, Chapter 12, and Chapter 13.

JoeLawyer

JoeLawyer

Attorney

376 satisfied customers

Attorney in the practice of Bankruptcy Law since 1996

A.J.

A.J.

Attorney

262 satisfied customers

Experienced consumer bankruptcy attorney.

Fritz

Fritz

Attorney

209 satisfied customers

Florida attorney with extensive experience in Chapter 7 and Chapter 13 consumer bankruptcy cases

Law Girl

Law Girl

Attorney

153 satisfied customers

I am an attorney.

Paul K, Esq.

Paul K, Esq.

Attorney

141 satisfied customers

10 years Exp., Great customer service, Prompt responses.

< Previous | Next >

Related Bankruptcy Law Questions
I am the buyer on a land contract. The seller wants to get
I am the buyer on a land contract. The seller wants to get out of the contract to go with another offer/contract. They have threatened to file bankruptcy if we do not accept a small fee to walk from o… read more
DrakeLAW
DrakeLAW
Juris Doctorate
973 satisfied customers
Law Educator I am attaching my rough draft to the trustee
Law Educator I am attaching my rough draft to the trustee -please advise in your professional opinion if there is something that needs to be deleted or added. Also, I am attaching the minute entry to … read more
PaulmoJD
PaulmoJD
Attorney At Law
Doctoral Degree
106 satisfied customers
If the trustee rules that the person filing for bankruptcy
If the trustee rules that the person filing for bankruptcy has an equitable interest in real estate, can that ruling interfere with his exemption. Or is he allowed then to file for his right of redemp… read more
DrakeLAW
DrakeLAW
Juris Doctorate
973 satisfied customers
Will my contracts with ATT, TV, and Cel phone be terminated
HI! will my contracts with ATT , TV, and Cel phone be terminated through bankruptcy 13 or 7? Thank you. … read more
LawGuy
LawGuy
Juris Doctor
123 satisfied customers
If you have a trial scheduled and the US Trustees Office is
If you have a trial scheduled and the US Trustees Office is trying to get your case dismissed and you have been dealing with your attorney who has been doing things that will get him disbarred, how do… read more
Michael Bradley
Michael Bradley
JD
1,191 satisfied customers
I have a contract with a California corporation and the
I have a contract with a California corporation and the consideration are Pref shares of the company. There are three payments; an initial payment, 2 years later and 4 year later. Paid in thirds. The … read more
TJ, Esq.
TJ, Esq.
Attorney
12,555 satisfied customers
Assignment of an executory contract in bankruptcy or a
Assignment of an executory contract in bankruptcy or a workout. If a corporation underwent an involuntary wind down. Say an ABC (Assignment for the benefit of Creditors) would the "sale of all or subs… read more
Phillips Esq.
Phillips Esq.
Attorney
Juris Doctor
18,327 satisfied customers
I have an Executory contract. A 10 year license of software.
I have an Executory contract. A 10 year license of software. We are the Licensor. The licensee has paid for the license with shares of its company (private). There are milestone payments. I believe th… read more
DrakeLAW
DrakeLAW
Juris Doctorate
973 satisfied customers
After a Chapter 7 Bankruptcy, an Equity loan was reaffirmed,
After a Chapter 7 Bankruptcy, an Equity loan was reaffirmed, but only by the husband. The wife never signed. Does this mean that the loan company now has lost consent? In her not reaffirming the loan … read more
PaulmoJD
PaulmoJD
Attorney At Law
Doctoral Degree
106 satisfied customers
I have hard evidence that the Trustee and Trustee atty were
Hello - I have hard evidence that the Trustee and Trustee atty were negligent, breached their fiduciary duties and allowed my federal case of fraud in the inducement run the SOL, without pursuing as t… read more
Dwayne B.
Dwayne B.
Juris Doctor
28,688 satisfied customers
The Trustee in a corporate bankruptcy case erased and/ or
The Trustee in a corporate bankruptcy case erased and/ or deleted tape recorded testimony of a key witness in a 2004 bankruptcy rule deposition. what recourse do I have being that witnesses testimony … read more
Legal Eagle
Legal Eagle
Attorney
Doctoral Degree
7,307 satisfied customers
Second opinion] The Trustee in a corporate bankruptcy case
Second opinion] The Trustee in a corporate bankruptcy case erased and/ or deleted tape recorded testimony of a key witness in a 2004 bankruptcy rule deposition. what recourse do I have being that witn… read more
DrakeLAW
DrakeLAW
Juris Doctorate
973 satisfied customers
My confirmation meeting is next week and th trustee wants a
my confirmation meeting is next week and th trustee wants a modified plan so i won't be confirmed, what may happen … read more
Phillips Esq.
Phillips Esq.
Attorney
Juris Doctor
18,327 satisfied customers
In the Utah code you sent me it states: 75-7-501 Rights of
In the Utah code you sent me it states: 75-7-501 Rights of beneficiary's creditor or assignee. "To the extent a beneficiary's interest is not protected by a spendthrift provision or Section 25-6-14, t… read more
Phillips Esq.
Phillips Esq.
Attorney
Juris Doctor
18,327 satisfied customers
I received notice from the Trustee of an "Order Striking
I received notice from the Trustee of an "Order Striking Filing For Failure To Comply With Required Procedures".I believe the problem is with a creditor who had an undeliverable address, however, I ha… read more
DrakeLAW
DrakeLAW
Juris Doctorate
973 satisfied customers
For a bankruptcy attorney. Let's say a person contracted
For a bankruptcy attorney. Hello, Let's say a person contracted with a business, and the business has filed bankruptcy. The business' bankruptcy attorney contacted the person and notified them that th… read more
Phillips Esq.
Phillips Esq.
Attorney
Juris Doctor
18,327 satisfied customers
I recently made my last chapter 13 payment to the trustees
I recently made my last chapter 13 payment to the trustees office. I fell behind on my mortgage and have been in a trial modification. On the notice of final cure my lender stated the amount I was del… read more
socrateaser
socrateaser
1,031 satisfied customers
Does the trustee need a court order to sell a debtors
Does the trustee need a court order to sell a debtors primary residence? The equity is claimed as exempt, but the trustee believes there is more equity in the house than the debtor claimed. Reference … read more
Phillips Esq.
Phillips Esq.
Attorney
Juris Doctor
18,327 satisfied customers

DISCLAIMER: Answers from Experts on JustAnswer are not substitutes for the advice of an attorney. JustAnswer is a public forum and questions and responses are not private or confidential or protected by the attorney-client privilege. The Expert above is not your attorney, and the response above is not legal advice. You should not read this response to propose specific action or address specific circumstances, but only to give you a sense of general principles of law that might affect the situation you describe. Application of these general principles to particular circumstances must be done by a lawyer who has spoken with you in confidence, learned all relevant information, and explored various options. Before acting on these general principles, you should hire a lawyer licensed to practice law in the jurisdiction to which your question pertains.

The responses above are from individual Experts, not JustAnswer. The site and services are provided “as is”. To view the verified credential of an Expert, click on the “Verified” symbol in the Expert’s profile. This site is not for emergency questions which should be directed immediately by telephone or in-person to qualified professionals. Please carefully read the Terms of Service (last updated February 8, 2012).

DISCLAIMER: Answers from Experts on JustAnswer are not substitutes for the advice of an attorney. JustAnswer is a public forum and questions and responses are not private or confidential or protected by the attorney-client privilege. The Expert above is not your attorney, and the response above is not legal advice. You should not read this response to propose specific action or address specific circumstances, but only to give you a sense of general principles of law that might affect the situation you describe. Application of these general principles to particular circumstances must be done by a lawyer who has spoken with you in confidence, learned all relevant information, and explored various options. Before acting on these general principles, you should hire a lawyer licensed to practice law in the jurisdiction to which your question pertains.

The responses above are from individual Experts, not JustAnswer. The site and services are provided “as is”. To view the verified credential of an Expert, click on the “Verified” symbol in the Expert’s profile. This site is not for emergency questions which should be directed immediately by telephone or in-person to qualified professionals. Please carefully read the Terms of Service (last updated February 8, 2012).

Show MoreShow Less

Ask Your Question

x