Seltzer

We must decide whether the retroactive application of a Nevada statute allowing debtors to exempt Individual Retirement Accounts from bankruptcy violates the Contract Clause of the United States Constitution. Both the bankruptcy court and the district court concluded that although the statute impaired private contract rights, the impairment was justified to achieve a valid public purpose. We agree and affirm.

I.

Kenneth and Sharon Seltzer (debtors) filed a Chapter 7 bankruptcy petition in December 1992, listing debts exceeding $600,000. Relying on Nev.Rev.Stat. § 21.090.1(q), debtors sought to exempt IRAs valued at $28,300 from their bankruptcy estate. The Nevada statute provides that effective October 1, 1991, debtors may exempt “[mjoney, not to exceed $100,000 in present value, held in ... [a]n individual retirement arrangement. Nev.Rev.Stat. § 21.090.1(q) (Michie Supp. 1995).

The trustee timely objected, contending that debtors’ reliance on a statute enacted after the debts were incurred violated the Contract Clause because debtors were allowed to shelter assets in a way not contemplated by the parties at the time they executed their contracts. The bankruptcy court agreed…