A recent case [Leitch v. Christians (In re Leitch), No. 13-6009 (8th Cir. B.A.P. Jul. 16, 2013)] determined that bankruptcy does not afford the health savings account (HSA) investment account protection from creditors. The rationale of the Court is that the HSA investment fund is fully accessible by the accountholder, albeit with additional tax consequences if money is withdrawn for other than qualifying medical expenses. In the Court’s view, this availability is sufficient to warrant exposing the account balance to the claims of creditors. Some states may provide a bit of protection; but the general rule is that the account is available to creditors.
Access articles and tools to help your business generate cash, improve leverage, and align & transform as you recover from the pandemic.
Access all COVID-19 related articles to help your business respond to the pandemic.