A law before Congress may give creditors limited access to IRA accounts, in the event that you declare bankruptcy. This proposal would mark a fundamental change in the direction of federal retirement policy. Some financial planners and retirement plan advocates are seeing red. Others say it's about time Americans took responsibility for their financial habits. Federal law protects it.
IRAs are a different story.
They have some chinks in their armor that two senators want to open further. This has many retirement and investment advisors up in arms, decrying the possible end of the sanctity of retirement accounts. Traditionally, retirement law has favored more, not fewer, protections for nest eggs, he says. This means if you file for bankruptcy, your creditors can't force you to use your retirement assets to pay your debts. You also can't use these retirement assets as collateral for a loan.