A:

State law determines whether or not an IRA, including SEP, SIMPLEs and Roth IRAs, can be attached in any bankruptcy proceedings, judgment or garnishment. The law varies among states and is subject to change at anytime.
The following are a few examples:
New York: The New York Statute protects Traditional, Roth and SIMPLE IRAs from bankruptcy proceedings. However, there have been at least two cases in which the court ruled that SEP IRAs are not offered the same protection; this resulted in differing legal opinions on whether SEPs are offered the same protection as Traditional, Roth and SIMPLE IRAs. Furthermore, the protection does not extend to amounts contributed to the account within 90 days after the judgment, or where judgment is made in cases of fraud.
Alabama: Traditional, SEP and SIMPLE IRAs are protected, but Roth IRAs are not.
New Jersey: Traditional, Roth, SEP and SIMPLE IRAs are protected, except where judgment is made in cases of fraud.
Utah: Traditional, Roth, SEP and SIMPLE IRAs are protected.
As you can see, the response will vary depending on the state. To be sure, consult with a lawyer to determine the law in your state and its applicability to the specific case.

This question was answered by Denise Appleby
(Contact Denise)

RELATED FAQS
  1. Can a simplified employee pension (SEP) IRA be converted to a Roth IRA in the same ...

    Yes. An SEP IRA can be converted to a Roth IRA.As you may know, an SEP IRA is just a Traditional IRA that receives employer ... Read Answer >>
  2. Can I roll my SEP IRA into a Traditional IRA or should I convert to a Roth?

    Technically, the SEP IRA and the Traditional IRA are the same type of account. The only difference is that the SEP IRA is ... Read Answer >>
  3. I want to take advantage of retirement savings. Can I contribute $6K to a Roth IRA, ...

  4. Can I contribute to both a SEP IRA and a regular IRA?

  5. What will happen to my SEP IRA if I leave my current employer?

    Because the funding vehicle for the SEP is a Traditional IRA, the same transfer and rollover rules that apply to a Traditional ... Read Answer >>
  6. Is my IRA protected in a bankruptcy?

    Learn what types of IRA accounts are protected from creditors in a bankruptcy and to what dollar value each type of IRA is ... Read Answer >>
Related Articles
  1. Taxes

    Roth IRA Vs. Traditional IRA

    Learn more about the differences between a Roth IRA and traditional IRA.
  2. Retirement

    The Best Bet for Taxes: Traditional or Roth IRAs?

    Choosing a Traditional IRA over a Roth IRA, or vice versa, depends on financial situation and long-term goals, especially if you want to trade.
  3. Retirement

    How a Roth IRA Works After Retirement

    What retirees need to know about taxes, distributions and passing on your unspent savings to the next generation.
  4. Financial Advisors

    Why Some Advisors are Shy to Convert Roth IRAs

    Potential upcoming changes from the Obama Administration could hit rollovers from traditional to Roth IRAs, and that has advisors reluctant to convert.
  5. Retirement

    Roth IRA Contribution Limits in 2016

    Discover the benefits of Roth IRA accounts and how much you can contribute for your retirement. Learn which IRA plan is best for you.
  6. Retirement

    6 Reasons Not to Recharacterize Your Roth IRA

    If you're thinking of recharacterizing your Roth IRA into a traditional IRA account, here are six compelling reasons why you should reconsider.
  7. Retirement

    Funding Your IRA vs. Your Roth IRA, Which First?

    The answer depends on where you are in your career and personal life each year. Here are some scenarios and rules to think about.
  8. Products and Investments

    Is the Roth IRA Under Threat?

    Roth IRAs are one of the most popular retirement savings accounts. Could Congress ever decide that too much money is being sheltered from taxation?
  9. IRAs and Roth IRAs

    What IRAs are: Tax-advantaged savings accounts for individuals. Pros: Tax benefits; investments grow tax-deferred and contributions may be deductible; numerous investment choices with range of ...
  10. Retirement

    5 Reasons to Convert a Roth To a Traditional IRA

    Here's a quintet of cases when the traditional IRA trumps the Roth version.
RELATED TERMS
  1. Roth IRA Conversion

    A reportable movement of assets from a Traditional, SEP or SIMPLE ...
  2. Individual Retirement Account - IRA

    An investing tool used by individuals to earn and earmark funds ...
  3. Roth IRA

    An individual retirement plan that bears many similarities to ...
  4. Traditional IRA

    An individual retirement account (IRA) that allows individuals ...
  5. Ordering Rules

    The order in which Roth IRA assets are distributed. Assets are ...
  6. Backdoor Roth IRA

    A method that taxpayers can use to place retirement savings in ...
Trading Center