Roth IRA's untouchable???

[loser104]

Was talking to my father about a possible ch.7 BK filing later in the year, and he said he had heard that the trustee can go after a Roth IRA, but not a traditional one. That just doesn't sound right.

I'm in michigan, and since I quit paying on my first and second mortgage's I have been able to save up quite a bit of money. So much so that I decided to sock away about $10,000 in a Roth IRA, half for 2009 and the other half for 2010. Did this just this week. Won't be filing for BK until probably october, so I will have put about 6 months of time between my IRA transaction and my filing.

I think my father heard wrong and is misinformed, but I thought I would throw it out there for you guys and gals. Is he wrong? I guess I can always convert it to a traditional, right?

[biotechsolution]

I believe you're right both IRA's are protected up to 1million and provided
you haven't deposited anything within 6 months. But check with your state exemptions to be sure.

also don't expect your 401(k) or IRA to be safe if you owe the IRS anything,
nothing is exempt from them.

[loser104]

Ok, that's what I thought. Did a little research and they are exempt. Haven't come across the "6-month" rule, but I will make sure that I put 6 months between the transaction and the filing.

[keepmine]

Looks like you need at least 120 days beween the coontribution and filing.

600.5451 - ERISA-qualified benefits as well as IRAs and Roth IRAS with the exception of contributions made within the last 120 days.

http://www.thebankruptcysite.org/exemptions/michigan.html