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mmdesq
mmdesq, Attorney
Category: Bankruptcy Law
Satisfied Customers: 518
Experience:  Attorney with 13 years experience.
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Are Direct IRA's and Equity Insurance Funds protected from

Customer Question

Are Direct IRA's and Equity Insurance Funds protected from bankrupcies and foreclosure claims?
Submitted: 1 year ago.
Category: Bankruptcy Law
Expert:  mmdesq replied 1 year ago.

Good Afternoon,

I will try to best answer your question.

What causes retirement assets to be protected are alienation provisions. Alienation provisions restrict access to funds by owner absent payment of penalty. For example accessing IRA funds prior to 59 and a half years of age. Hence if direct IRA or insurance equity funds have alienation provisions preventing access without paying a penalty they will be alienated from creditors the same as they are alienated from owner this is what protects the asset in bankruptcy or from foreclosure. Alienation provisions are good in this context. Hence if you can withdraw funds without penalty even the you are under 59 then they will be exposed to creditors.

Customer: replied 1 year ago.
Thank you....
Is alienation Fee, the same as surrender penalties?
Expert:  mmdesq replied 1 year ago.

No. Surrender penalties are when you make an early withdrawl from a CD. It is not because of age but contractual limitation.