Ohio client filing for bankruptcy
I have a client that is filing for bankruptcy and is thinking about rolling over his 401K into an IRA prior to the completion of the filing. Is there any potential problems that I should be aware of. For example it is my understanding that IRA are creditor protected so that shouldn’t be an issue – anything that I could be missing.
Thanks in advance,
Permalink Submitted by Alan - IRA critic on Fri, 2014-06-20 18:54
Ohio appears to protect IRA accounts from creditors, but I would look into the law further if any child support is past due. Also, should client move to another state that does not protect IRA accounts, the IRA balance would be exposed to creditors. Neither a 401k or an IRA is protected against IRS tax liens or marital settlements.