Bankruptcy in CA
The Bankruptcy Reform Act passed by Congress in 2005 give IRAs widespread protections in Bankruptcy Court. Up to $1,000,000.
My client lives in CA. At the state level they refer to “Amount Necessary For Support” is protected. And varies other criteria.
Does state law trump federal law because it is more restrictive?
Permalink Submitted by Alan - IRA critic on Fri, 2014-03-21 16:20
CA limited exemptions have priority and the state has opted out of most provisions of the federal BK Act. The amount necessary for support could be as little as 100k. Note that the federal Act is only beneficial in states that adopted it if the taxpayer files for bankruptcy in a federal court, and that exposes assets other than the IRA account.