Consumer Bankruptcy:

Protection of Assets - Trusts - Savings Plans

Certain assets, trusts, and saving plans are protected under the new bankruptcy law. These include:
-Retirement funds: Under sections 401, 403, 408, 408A, 414, 457 and 501(a) of the Internal Revenue Code, retirement funds that are tax exempt and are consequently exempt from claims of the creditors. Furthermore, money that is rolled over from a pension to an IRA is also exempt. The law, however, limits this exempt status for funds in both regular and Roth IRS’s to $1 million. This amount can be increased at the discretion of the bankruptcy court. It is also of note that paying back a 401(k) loan is an acceptable deduction from income when determining the amount of the debtor’s disposable income for the “means test.”
529 college funds: Not all contributions to college funds or education IRS’s are exempt. Those places in a 529 college education savings plan or a section 530 education IRA at least two years prior to filing are protected. Those made between one and two years prior to filing are also protected, but only up to $5000. Finally, those made within a year of filing are not exempt from the claims of creditors. It is important to note that the exemptions stated are only applicable in the event that the beneficiary is a child, stepchild, grandchild, or step-grandchild (this includes adopted or foster child).
Asset protection trusts: The laws of Alaska, Delaware, Nevada, Rhode Island and Utah allowed for the establishment of an asset protection trust.  The former bankruptcy law protected these from creditors.  Under the new bankruptcy law, the case trustee may avoid transfers made to an asset protection trust, within the previous ten years, with the actual intent to hinder, delay or defraud a creditor.