Trying to sell investment prop. in a short sale. Can my IRA be forced to be liquidated? 401K?

Hello! I have heard that people are not able to touch your "retirement account fund" (which goes for 401K's and IRA's etc.). I know this, because I have been a RE agent, and someone was desperately trying to re-finance their home (and this person had all kinds of creditors, government and otherwise, pounding down his door). This person ACTUALLY had his Retirement money taken out by some governmental agency, but because he knew his rights... he objected, and GOT his money placed back in his retirement account)!! So, the simple answer would be: "NO, your IRA cannot be forced to be liquidated!" The only way that your 401K could be "touched" by anyone, would be if you, yourself were able to take a loan (avg. employer 401K loan is 85%) of the accumulated balance; out on your own 401K and then, ONLY if you got fired or laid off. In that case, your employer would be able to call the loan "due and payable" (and you would have to put back the money you borrowed on your 401K, almost immediately). The other question is a little bit more in the "grey area", as I don't know who "they" are. My guess would be that people can't force you to do anything, but the banks might foreclose your property out (depending on which state you are in). I suppose that Foreclosing or having a Bank Take over of your property almost amounts to a "forced sale". I also believe that the LLC would offer you some protection, if properly purchased through an LLC (in any case, it should offer you the Limited Liability protection, in most cases! I sure hope that you find help for your situation (please realize that if you are one of the multitudes of people that got caught with a bad mortgage/interest rate".I hope the government may step in to help people like you, very soon!

An IRA is protected from creditors, which is why it cannot be used as collateral for a loan. A 401(k) is also protected. The reason you can borrow from that (for limited purposes) is because your employer has you by the purse strings. If you leave that employer or are terminated, a 401(k) loan would be immediately due, and if not paid would be considered a distribution (subject to tax and 10% penalty if under age 59.5).