Creditors Can't Seize I.R.A.'s, High Court Rules

WASHINGTON (AP) -- The Supreme Court gave bankrupt Americans another layer of financial protection Monday, ruling that creditors cannot seize their Individual Retirement Accounts. The unanimous decision shields a nest egg relied upon by millions of people. The justices said IRAs should join pensions, 401(k)s, Social Security and other benefits tied to age, illness or disability that are afforded protection under federal bankruptcy law. Justice Clarence Thomas, writing for the court, said a bankrupt Arkansas couple was entitled to keep more than $55,000 in retirement savings from creditors. He reasoned that IRAs are benefits tied to a person's age under the federal statute because a tax penalty is imposed if a person makes withdrawals before age 60.