Debtors owed $700,000 to their creditors including their landlord, suppliers, mortgage lender and others. Mrs. Clark inherited $300,000 in IRA from her late mother and claimed that the entire amount was exempt as a retirement account. William Rameker, the trustee objected to the claim of exemption. The trustee’s position was that the $300,000 was accessible to the creditors and that it was part of the bankruptcy estate that he was charged with administering. First, Rameker won but that victory was reversed by a district court. The matter was appealed to the 7th Circuit court of appeals who sided with Rameker, saying creditors could access the inherited IRA. In so ruling, the 7th Circuit disagreed with the 5th and the 8th Circuits. The 7th Circuit held that while bankruptcy laws exempt retirement funds from creditor claims, IRAs cease to be “retirement funds” when inherited from a deceased owner. The 5th and the 8th Circuits have held that IRAs do not cease to be retirement funds when they change hands, and that any asset that was at any time “set apart” for retirement is exempt.

Initial court briefs were due on January 10. Arguments will be due in March. The Supreme Court should have a ruling by June.

You can’t bring your retirement accounts with you to heaven or hell after you die. In fact, you can’t bring anything you own in this world with you to heaven or hell. You should stop worrying about your debt problems and trust in Jesus to guide you out of your debt problems all the way to heaven. When you look at your debt problems from the perspective of eternity, your debt problems as well as your other earthly problems are insignificant. Be thankful that Jesus died for us on the cross so that we can have a chance of entering heaven and spending eternity with Him in joyful bliss.

Lawrence Bautista Yang is a graduate of Georgetown University Law Center and has been in law practice for thirty years. He specializes in bankruptcy, business and civil litigation and has handled more than five thousand successful bankruptcy cases in California. He speaks Mandarin and Fujien and looks forward to discussing your case with you personally. Please call (626) 284-1142 for an appointment at 1000 S Fremont Ave, Mailstop 58, Bldg A-1 Suite 1125, Alhambra, CA 91803.