Thursday, April 21, 2005
Bush signed the new Bankruptcy Act into law on Wednesday, April 20, and it becomes effective 180 days from that date. So, on or about October 17, 2005, by my count the new Act will the the law of the land.
We will have detailed coverage on the effect of the new Bankruptcy Act as it relates to asset protection planning in the May edition of our Developments newsletter, which you can subscribe to from
http://risad.com/subscribe.php
posted by Jay
@ 4/21/2005 09:26:00 PM
Thursday, April 14, 2005
The new Bankruptcy Act has passed the House, 302 to 126, without any change to the version passed by the Senate (so no need for conference committee). Bush has indicated that he will sign.
More details soon.
-- Jay
posted by Jay
@ 4/14/2005 04:18:00 PM
U.S. Supreme Court Recognizes Some Level of Exemption for Individual Retirement Accounts in BankruptcyIn
Rousey v. Jacoway, U.S. S.Ct. Appeal No. 03-1407 (April 4, 2005), the U.S. Supreme Court recognized that a couple's individual retirement account (IRA) were protected to a degree from the couple's creditors, where the couple had filed for a Chapter 7 bankruptcy.
The couple sought protection for a portion of their IRAs under 11 U. S. C. sec 522(d)(10)(E), which provides that:
"a payment under a stock bonus, pension, profit-sharing, annuity, or similar plan or contract on account of illness, disability, death, age, or length of service, to the extent reasonably necessary for the support of the debtor and any dependent of the debtor . . . ."
Of course, this ruling may not apply to "large" IRAs because of the clear wording of the statute that the exemption shall only apply "to the extent reasonably necessary for the support of the debtor and any dependent of the debtor". Thus, while this case is undoubtedly a victory for debtors seeking to protect their IRAs, it should not relied upon by a person with a very large IRA who is susceptible to creditor claims that they do not reasonably need the money in the IRA for their support.
