Senate passes bankruptcy reform bill
The Bankruptcy Reform Bill, passed by the US Senate today, contains added protections for 529 plan accounts and education IRAs. The House passed a similar measure two weeks ago.
Amounts contributed to a 529 plan for the benefit of a debtor's lineal ancestors will be protected from
creditors in a bankruptcy proceeding, as long as the contributions do not exceed the maximum allowable contribution limit described under section 529 and were contributed at least 720 days before the date of filing. For contributions made at least 375 days before the date of filing, but less than 720 days, the amount protected from creditors is limited to $5,000.
Return to 529 News centerAmounts contributed to a 529 plan for the benefit of a debtor's lineal ancestors will be protected from
creditors in a bankruptcy proceeding, as long as the contributions do not exceed the maximum allowable contribution limit described under section 529 and were contributed at least 720 days before the date of filing. For contributions made at least 375 days before the date of filing, but less than 720 days, the amount protected from creditors is limited to $5,000.