The United States Bankruptcy Code provides that contributions to 529 accounts may be protected from creditors in bankruptcy proceedings, subject to certain limitations. Should you file for relief under the Bankruptcy Code, your 529 account will be protected if, at the time the contributions were made, the designated beneficiary was your child, stepchild, grandchild, or step-grandchild (including a child, stepchild, grandchild, or step-grandchild through adoption or foster care), subject to the following limits:
Contributions made to all 529 accounts for the same designated beneficiary at least 720 days before a federal bankruptcy filing are completely protected;
Contributions made to all 529 accounts for the same designated beneficiary more than 365 days but less than 720 days before a federal bankruptcy filing are protected up to $6,825; and
Contributions made to all 529 accounts for the same designated beneficiary less than 365 days before a federal bankruptcy filing are not protected against creditor claims in federal bankruptcy proceedings. Your own state law may offer additional creditor protections. Consult with an attorney regarding your specific situation.