''Rousey v. Jacoway'', 544 U.S. 320 (2005), was a bankruptcy case decided by the

United States Supreme Court The Supreme Court of the United States (SCOTUS) is the highest court in the federal judiciary of the United States. It has ultimate appellate jurisdiction over all U.S. federal court cases, and over state court cases that involve a point o ...

in which the Court held that

Individual Retirement Account An individual retirement account (IRA) in the United States is a form of pension provided by many financial institutions that provides tax advantages for retirement savings. It is a trust that holds investment assets purchased with a taxpayer's e ...

s (IRAs) qualify for certain exemptions under

Title 11 of the United States Code Title 11 of the United States Code, also known as the United States Bankruptcy Code, is the source of bankruptcy law in the United States Code. Chapters Title 11 is subdivided into nine chapters. It used to include more chapters, but some of them ...

Background

Richard and Betty Jo Rousey filed a joint

Chapter 7 bankruptcy Chapter 7 of Title 11 of the United States Code (Bankruptcy Code) governs the process of liquidation under the bankruptcy laws of the United States, in contrast to Chapters 11 and 13, which govern the process of ''reorganization'' of a debto ...

petition in the

United States Bankruptcy Court United States bankruptcy courts are courts created under Article I of the United States Constitution. The current system of bankruptcy courts was created by the United States Congress in 1978, effective April 1, 1984. United States bankruptcy c ...

for the Western District of Arkansas. They petitioned the court to shield portions of their IRAs from their creditors under section 522(d)(10)(E) of the

United States Bankruptcy Code Title 11 of the United States Code, also known as the United States Bankruptcy Code, is the source of bankruptcy law in the United States Code. Chapters Title 11 is subdivided into nine chapters. It used to include more chapters, but some of them ...

(). Jill Jacoway, the Chapter 7 trustee, objected to the petition, and the court sustained the objection. The Bankruptcy Appellate Panel and the Eight Circuit Court of Appeals both affirmed.

Opinion of the Court

Justice Thomas delivered the opinion of the unanimous court. The Court held that IRAs qualify for exemption because such plans are intended to substitute income (like other plans and programs specifically listed in the statute) and payments from the plan are because of one's age, thus satisfying the section's requirements.

External links

* 2005 in United States case law United States bankruptcy case law United States Supreme Court cases United States Supreme Court cases of the Rehnquist Court {{SCOTUS-stub