Your retirement accounts, such as 401ks, are typically safe in bankruptcy and cannot be used to pay creditors. Traditional IRAs and Roth IRAs are protected up to a limit (currently more than $1 million). However, a U.S. Circuit Bankruptcy Court of Appeals recently ruled that when retirement assets are divided in a property settlement in a divorce, these assets are not protected from creditors. The Court’s opinion stated that the exemption from bankruptcy is limited to the individuals who create and contribute funds to the retirement accounts. This article summarizes the Court’s ruling.
Alimony or spousal support is common in divorces where the payee spouse may have lower or no earnings than the payor spouse. States use their own formulas for calculating the statutory spousal support. Additional facts and circumstances may affect the final amount, such as payee’s prospects for getting employed, variability of the payor’s income, etc.
This article provides additional considerations that affect alimony.