ROUSEY v. JACOWAY

Print this Page
Case Basics
Docket No. 
03-1407
Petitioner 
Richard Gerald Rousey, et ux.
Respondent 
Jill R. Jacoway
Advocates
(argued the cause for Petitioners)
(argued the cause for Respondent)
Tags
Term:
Facts of the Case 

Richard and Betty Rousey filed bankruptcy and claimed their two Individual Retirement Accounts were exempt from the bankruptcy. Federal law exempted the following from bankruptcy: "a payment under a stock bonus, pension, profitsharing, annuity, or similar plan or contract." The exemption had to be "on account of illness, disability, death, age, or length of service, to the extent reasonable necessary for the support of the debtor...." The Rouseys said an IRA was a "similar plan or contract." The bankruptcy court and a bankruptcy appellate panel ruled an IRA not a "similar plan or contract." The Eighth Circuit Court of Appeals ruled that even if IRAs are "similar plans or contracts," the Rouseys' account withdrawals would not be "on account of illness, disability, death, age, or length of service." The Eighth Circuit's ruling conflicted with those of other circuits.

Question 

Are individual retirement accounts (IRAs) exempt from bankruptcy estates?

Conclusion 
Decision: 9 votes for Rousey, 0 vote(s) against
Legal provision: Bankruptcy Code, Bankruptcy Act or Rules, or Bankruptcy Reform Act of 1978

Yes. In a unanimous decision delivered by Justice Clarence Thomas, the Court held that the Rouseys could exempt IRA assets from their bankruptcy estate. IRAs met both federal requirements dealing with exemptions from bankruptcy: They were "similar plans or contracts" to the exemptions enumerated and they "conferred a right to receive payment on account of age."

Cite this Page
ROUSEY v. JACOWAY. The Oyez Project at IIT Chicago-Kent College of Law. 15 December 2014. <http://www.oyez.org/cases/2000-2009/2004/2004_03_1407>.
ROUSEY v. JACOWAY, The Oyez Project at IIT Chicago-Kent College of Law, http://www.oyez.org/cases/2000-2009/2004/2004_03_1407 (last visited December 15, 2014).
"ROUSEY v. JACOWAY," The Oyez Project at IIT Chicago-Kent College of Law, accessed December 15, 2014, http://www.oyez.org/cases/2000-2009/2004/2004_03_1407.