IRA protected from collection agency?
I have a friend who is being contacted by a collection agency for emergency medical services she received. Is her IRA protected?
I have a friend who is being contacted by a collection agency for emergency medical services she received. Is her IRA protected?
Permalink Submitted by Alan - IRA critic on Sat, 2014-03-08 19:33
What state is she in?
Permalink Submitted by Patti Frazier on Sat, 2014-03-08 20:07
She is in California.
Permalink Submitted by Alan - IRA critic on Sat, 2014-03-08 23:03
Ouch! One of the worst states for creditor protection. CA has opted out of the Federal Bankrupty Act and only provides IRA creditor protection to the extent of IRA owner’s basic living expenses. That turns out to be around as little as 100,000.
Permalink Submitted by Patti Frazier on Sun, 2014-03-09 15:16
She is young and just beginning to fund an IRA. I am encourging her to open her first IRA but she is afraid the collection agency will seize it even though she is making payments on the medical debt.
Permalink Submitted by Alan - IRA critic on Sun, 2014-03-09 16:26
Since the agency must leave around 100k in the IRA, if her balance is less than that, they probably would not bother with the IRA.
Permalink Submitted by Patti Frazier on Sat, 2014-03-15 16:33
Thank you.