Can My Bankruptcy Trustee Take The Money I Withdrew From My IRA?

Yes, in certain circumstances.  If you have claimed the IRA as exempt under Texas law, and you take out a lump sum during a bankruptcy and do not reinvest it in another IRA (a nontaxable rollover) within 60 days, then the money is no longer considered an IRA and it may be seized by your bankruptcy trustee.

My recommendation: Don't take a lump sum distribution from your IRA during a bankruptcy if you have claimed the funds as exempt under Texas law, unless you are doing a nontaxable rollover to another qualified plan.  Check with your bankruptcy lawyer first.  The safe bet is to wait until the bankruptcy case is not only discharged but closed.

If you have questions about bankruptcy, I recommend using a qualified Fort Worth bankruptcy attorney.  As an experienced and dedicated Fort Worth bankruptcy attorney, I can offer advice on how to proceed based on your particular situation.  You and I can meet face to face to discuss your options.  I look forward to helping you become debt free.  To schedule a FREE consultation, please contact me at (817) 732-7590 or (972) 819-3861.  You can also send me an E-mail or complete the Free Case Evaluation.