IRA Contribution

[luadams]

What is the yearly amount you can contribute to an IRA after filing Chap 13?

[HHM]

Easy...

Zero

Well, at any rate, you cannot actually budget for an IRA contribution in your chapter 13 plan. But, if your plan is such that you actually end up with a little money at the end of the month, then you can put that into your IRA.

[luadams]

[HHM]

First, 401K's are not IRA's. 541(b)(7) is specific to 401K and the public equivalents, also, striclty speaking, 541(b)(7) is held to apply to only the "employers" contribution, not the employees voluntary withdrawal. Also, that ruling on 401K's is by no means accepted nation wide. However, most districts will allow you to contribute up to your companies matching percentage.

This is the type of confusion that gets started when only snippets are presented. Section 1322(f) simply states that the plan cannot alter the terms of a loan repayment (at least in most districts), in so far as it references section 362(b)(19). Section 362 is about the automatic stay and merely states that the automatic stay does not apply to loan repayments to various types of accounts described therein (it used the language "for the benefit of the pension...etc") So yes, loan repayments to various types of retirement accounts are ok, but contributions...that is another story and it is still largely unsettled. 401K's are usually ok because the amount is usually small, but IRA's, maybe someone can delve in and try to find a case, but so far, I am not aware of any that specifically allows continued contribution to an IRA (unless you are in a 100% repayment plan).

When calculating disposable income, a Chapter 13 debtor was only allowed to deduct the actual amounts necessary to repay her 401K loans. Once the loans are repaid, the debtor must then redirect the funds used to repay the loans to unsecured creditors and, contrary to her contentions, may not keep them. The Bankruptcy Code provides that only the amounts required to repay 401K loans are excluded from disposable income, and once the loans are repaid, the amount formerly allotted to repayment of the 401K loans becomes disposable income.

In re Anne B. LASOWSKI, Debtor.

David D. COOP, Trustee/Appellant v. Anne B. LASOWSKI, Debtor/Appellee.

United States Bankruptcy Appellate Panel for the 8th Circuit. Docket
No. 07-6063. 2008 Bankr. LEXIS 825. March 31, 2008.

[justbroke]

... but so far, I am not aware of any that specifically allows continued contribution to an IRA (unless you are in a 100% repayment plan).

I haven't either and would be interesting if someone could find one. I find nothing in the code which takes IRA contributions from the calculation of disposable monthly income. (11 USC 541)