I invested with crooks and was awarded a judgment but…

Question: In 1997 my bank rolled over $150,000 to a rollover account in florida. At this time the monies were stolen. I was awarded a judgment against the 4 persons that took the monies but have only collected $6,000 so far. If, and when I collect any or all monies, do they belong in my IRA account that they came from? And can a third party like a bankruptcy trustee access the judgment and any monies collected to pay off any creditors?

I never did see or have control of these funds. They were transferred into a self directed IRA and stolen from there. I have been told that a bankruptcy trustee can not use these funds to pay off any creditors and any funds recovered should go back into my ira and if treated as a withdrawal it would be taxable event. If this true is their any law and or cases to support this?

Answer: With regard to your question below, it is somewhat difficult to answer without more information, and in any event the question is best answered by your bankruptcy attorney as well as the attorney who is helping you collect this judgment.  My first question would be who has the judgment, you or your IRA?  If you were the plaintiff individually, then the money collected may not be exempt from the bankruptcy estate since it isn’t in the name of your IRA, whereas if the judgment is in the name of your IRA it is may be exempt as an asset of your IRA, not you individually, depending of course on state law where you are as well as whether you chose state or federal exemptions in your bankruptcy.  Your attorney will be able to give you better information than I can.

The bottom line is that there are insufficient facts to really answer your question, and what you really need is legal advice from an attorney who has all the facts in front of him or her.  I’m sorry I can’t be of more assistance to you.  Good luck in your future endeavors and thanks for the question.


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