Should I file for chapter 7 bankruptcy with an IRA account?

If you file for chapter 7 bankruptcy, you are probably already aware that this involves you losing a lot of your stuff. Chapter 7 bankruptcy requires those who are filing to make a list of the assets and possessions they have, including property, personal possessions and money in bank accounts. Much of this does get turned over to the court in order to be sold and to generate some cash to give to your creditors. However, not everything is subject to seizure during a chapter 7. 

One of the main things that is exempt is retirement accounts. Since an IRA is considered to be a retirement account, it will not become part of the chapter 7 bankruptcy seizure of assets, and creditors and the bankruptcy courts will not touch the money. 401Ks are also protected. This is true in every state. There are also other state specific exemptions and rules relating to how much of your home equity and other personal property you keep.

Because an IRA is protected, it shouldn't affect whether or not you file chapter 7. Of course, the amount of other assets that you have, as well as the amount of income that you have, will affect whether or not you should file for a chapter 7. 

Because there are several factors that go into deciding what chapter of bankruptcy is right for you, it is a good idea to talk to an experienced bankruptcy attorney for help when you are deciding whether you are better off filing a chapter 7 or a chapter 13.