IRA protection in texas and international from debtors

Submitted by rao srini on Mon, 2016-09-05 18:34

I have a important question.
I have significant credit card debt (about 30000+) which I am unable to pay now since 4 months so would like to go for debt settlement.(not consolidation but reducing the amount) . I also have us bank account which has 3000+ but has been leveyed or frozen and also have IRA in texas which has significant money $39000. they IRA money from the time I was working in Texas USA so not inherited. I used to work in Texas USA for few years and then moved internationally so currently out of USA. I am not a us citizen or green card holder.

I WANT TO KNOW FEW things
1. In texas in case of debt default or judgement , I know 401k or IRA cannot be taken from me by creditors is it true?
2. from a legal point of view if I tell the creditors that I am out of USA for some time and my only assets in USA is my us bank account ,My IRA with a Texas address. Can they still come after my Fidelity IRA (although Texas law protects it http://www.thetaxadviser.com/content/dam/tta/issues/2014/jan/stateirachart.pdf ) if don’t want to file for bankruptcy.
IF i take a loan or withdrawal out of my IRA then It becomes susceptible to creditors i think.
3. I don’t want to file for bankruptcy as it will effect my future prospects.
when I come to US at a later date

Please advice me on protecting my IRA from US creditors for a non US citizen. My retirement is still 25 years away so want to protect without a withdrawal.



Submitted by William Tuttle on Tue, 2016-09-06 00:57

  1. Texas has probably one of the best asset protections in the country, even specifically including inherited accounts after the SCOTUS ruling. See Texas property code 42.001.
  2. I am not at lawyer, but it is not clear to me if you retain those protections, since you are not a citizen, legal resident or any kind of current Texas resident. I think you need legal counsel,

Don’t even think of taking a loan from an IRA or use it as collateral. It would be a prohibited transaction. Causing the forced distribution of the entire account. This would then be subject penalties, taxes and the full rights of the creditors on the net balance.

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