We are discussing how the Bankruptcy Code deals with individual retirement accounts. The parties are not from Illinois, but it has gone to the U.S. Supreme Court. The decision could change the law for everyone.
Bankruptcy is supposed to offer you a fresh start. The idea of bankruptcy is to clear the decks, really, to stop the collections calls and to let the bankruptcy trustee and the court deal with the creditors. In a Chapter 13 repayment plan, the debtor pays the trustee who then pays the creditors. In a Chapter 7 liquidation plan, the trustee liquidates the debtor's nonexempt assets and pays off unsecured creditors; secured creditors, say the finance company that gave the debtor his car loan, must ask the bankruptcy court for permission to repossess the collateral, in this example the car.