Does bankruptcy change my retirement plan's protection?

Recent bankruptcy law changes have expanded the lawsuit protection for IRAs. The new rules protect IRA rollovers from tax-qualified plans, regardless of where the IRA owner resides. The new bankruptcy law further exempts from creditor claims IRAs up to one million dollars, as well as IRAs and IRA earnings for larger amounts as may be determined by the bankruptcy court as necessary for the debtor's support. Simple retirement accounts, a simplified employee pension (SEPs) and 'rollovers' to the IRA from a qualified plan or another IRA are disregarded under this million dollar limit. Stated differently, the part of your IRA attributable to assets 'rolled over' from a tax-qualified plan and earnings on those rolled over assets – typically all or a large portion of the IRA assets – are protected, even if it exceeds one million dollars.

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