Can a creditor go after my IRA account?


Q. I was notified by a county sheriff that my Roth IRA was levied and a creditor is pursuing it in New Jersey state court for liquidating or garnishment. This was from a lawsuit filed against by business back in 2016. What can I do?
— Concerned

A. This is unfortunate.

Here’s what you need to know.

Under federal law, IRA accounts, whether Roth or traditional, are not protected from creditors, said Steven Gallo, a certified public accountant and personal financial specialist with U.S. Financial Services in Fairfield.

A 401(k) account would have federal protection, he said.

But New Jersey does extend this protection to IRAs, Gallo said.

“Although your creditor has won a judgment, they must petition the New Jersey court for enforcement, and that is where they will most likely be denied the right to liquidate or garnish your Roth IRA,” Gallo said.

Good luck to you.

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This story was originally published on Feb. 17, 2022. presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.