Credit Union with IRA Account

[Flinx]

I am a member of a credit union which I have a Retirement IRA account with. I also have a credit card with a balance of over $30,000.00 on it with them also. If I file Chapter 7, or stop paying the credit card, can they sieze my IRA account to cover the amount owed?

[FreshLikeADaisy]

I'm not sure. I don't know if the laws governing IRAs preclude cross-collateralization with other accounts or not.

But you should be able to get a copy of the current RICA from the credit union (RICA: Retail Installment Credit Agreement; the credit card "contract") and read it over for any references to cross-collateralization, as well as the IRA account terms. I don't know that I would call them and ask directly; not only would I not rely on a customer service rep's word for it, I would not want to alert them to any forthcoming situation.

However, don't you have the right to *transfer* your IRA to another institution? Even if your IRA were cross-collateralized with this credit card, moving it to another bank would make it a moot issue. Maybe someone else will pitch in with better info on IRAs, but moving the IRA to a separate bank altogether (if you can) seems like the best strategy anyway, because no change in the terms of either account, cc or IRA, will allow the credit union to grab it at another bank. Good luck!!!

[Flinx]

My IRA's are in the form of Certificate of Deposits. I don't know if I could transfer them to another bank without losing all of the interest that has accumulated so far.

[CindyLou]

I would certainly do a rollover ASAP....then ask questions later! It can't hurt to do the rollover as long as you use the proper forms to keep it tax exempt. Call any finanical advisor for any of the advertised IRA's and they will gladly help you roll it over to their bank.

edit: the last post came at the same time as mine but brings up a good point regarding the interest. However, if you are going to loose the whole acct then losing the interest wouldn't be the end of the world. You didn't mention the amount of money in this acct; if it is more or less than the amount of your credit card.

Just for clarification, the reason my husband's was deleted was because the court did not respond. Thus even if the dispute is not valid the same thing can happen.

[Flinx]

The money in my IRA is more than I owe on the credit card.