When you file for bankruptcy, your IRA (short for Individual Retirement Account) is typically protected from creditors, which means they can't get their hands on it. However, a debate has risen over whether an Inherited IRA should have the same protection in bankruptcy.

Initially, the courts ruled that Inherited IRAs should not be protected under bankruptcy in the same manner as regular IRAs are. However, when this decision was taken to an appeals court, the decision was overturned.

At the appeals court, the 8th Circuit’s Bankruptcy Appellate Panel disagreed that the funds should not be protected. Rather than focusing on who contributed the funds, the court concluded that the federal bankruptcy exemption only requires the funds to be “retirement funds” to be protected. In short, Inherited IRAs are protected if you file for bankruptcy.

In 2005 when Congress amended the bankruptcy law, most of the provisions did not benefit the consumer. However, Congress did add the provision that protected IRAs and retirement fund assets and also required states to do the same. So here again we have a pro-consumer law that favors the debtor in bankruptcy.

If you are thinking of filing for bankruptcy and have knowledge that you may be inheriting a relative's IRA or any other assets, it is always recommended that you contact an experienced bankruptcy who is well-versed in matters involving bankruptcy and inherited assets. With some types of inheritances, the debtor is not so protected, so hiring an attorney is advisable if you want to maximize the outcome of any inheritances.

Here’s the case: A man filed for Chapter 13 bankruptcy and began a repayment plan approved by the bankruptcy court. All of the creditors that the man owed were told about the payment schedule and none had any objections. The man successfully fulfilled the repayment plan and the debts were discharged by bankruptcy court. After the debts were discharged, however, the company that had issued the man’s student loans protested that he still owed them $4,000 in interest, even though it was not included in the original payment plan. The case was taken to the Supreme Court, which ruled in favor of the debtor, who held that the debtor had fulfilled his Chapter 13 bankruptcy obligations and therefore did not owe the additional $4,000. The court's reasoning was because the creditor did not ever protest when they were originally told about the payment schedule.

This ruling is a positive precedent for all bankruptcy filers and provides them even more protection from creditors. If creditors fail to object to payment plans within the time they are allowed to protest, they will not be able to successfully object after the debts are discharged. In short, once your debts are discharged by the bankruptcy court, you no longer need to worry about creditors collecting any more debt.

For bankruptcy filers and debtors, this ruling should be considered a breath of fresh air. This is because ever since 2005, when the Bankruptcy Abuse Prevention and Consumer Protection Act was passed, debtors' rights under bankruptcy laws have been limited. With these two recent rulings, however, at least some important rights of debtors during bankruptcy are being established by the courts.

A New York Times article from December, 2009 reports that this year (2009) an estimated $5 billion of gift card value will go unused and revert back to the issuer.  Some of the cards are lost, while others lose value month by month through inactivity fees.  One gift card vendor promotes its services to retailers by claiming that that rotating gift card display may be the store's most profitable square foot of space in the location.

Responding to consumer complaints, Congress has stepped in with sweeping regulations that limit inactivity fees and restricting expiration.  Disclosure requirements have also been enhanced.  But, bowing to pressure from retailers and banks, these new rules do not go into effect until August, 2010 – meaning that they do not apply for the 2009 Christmas season.