Rousey v. Jacoway, 544 U.S. 320 (2005)

In Rousey v. Jacoway, 544 U.S. 320 (2005), the underlying dispute arose when Richard and Betty Jo Rousey, after being terminated from their employment at Northrup Grumman Corp., received lump-sum distributions from their employer-sponsored pension plans. They subsequently deposited these funds into Individual Retirement Accounts (IRAs) in their names. The Rouseys later filed a joint Chapter 7 bankruptcy petition in the United States Bankruptcy Court for the Western District of Arkansas, seeking to exempt portions of their IRAs from the bankruptcy estate under 11 U.S.C. §522(d)(10)(E), which allows debtors to exempt certain payments related to pension and similar plans. The procedural history began with the Rouseys' bankruptcy filing, where they claimed their IRAs as exempt assets. Jill R. Jacoway was appointed as the Chapter 7 Trustee to oversee the bankruptcy estate's liquidation. The Trustee contested the Rouseys' exemption claims, leading to a series of rulings in the bankruptcy court and subsequent appeals. The case ultimately reached the United States Court of Appeals for the Eighth Circuit, which ruled on the exemption issue, prompting the Rouseys to seek a writ of certiorari from the Supreme Court. The relevant background context includes the provisions of the Bankruptcy Code, which allows debtors to exempt certain assets to protect them from creditors during bankruptcy proceedings. The specific exemption in question, 11 U.S.C. §522(d)(10)(E), is designed to provide debtors with a means of retaining necessary funds for their support and that of their dependents. The case raised significant questions about the treatment of IRAs under bankruptcy law, particularly regarding whether these retirement accounts could be exempted in the same manner as other pension-related assets.

Whether debtors can exempt assets in their Individual Retirement Accounts (IRAs) from the bankruptcy estate pursuant to 11 U.S.C. §522(d)(10)(E).

The judgment is reversed.