Should we start a 401k before we file?

[Mere]

We currently do not have anything set up for retirement, should we start our 401k's before we file, or is that not a good idea?

[AngelinaCat]

This depends on a number of factors. When do you plan to file? Or have you thought that far ahead yet? Are you both employed? And if you are, and your employer offered the 401k opportunity, why have you not taken it before now? You should have been planning for retirement before now. And, how long have you been employed? Do you have an attorney? Or are you just 'thinking about it'? What Chapter are you thinking of filing; a C7 or a C13?

I ask all of these things, because if I can think of these off the top of my head, a trustee certainly will, and will add more questions to boot.

If you start a 401k now and file within the next six months, you may have a problem with the 'look-back' period. It will look like you are trying to hide assets. It can also be considered a 'fraudulent transfer', for the same reason.

If you truly wish to start up a 401k plan, do it now, and put as much into it as you possibly can. Then you do NOT even think of filing BK until after a full two years has passed. At that point you should be safe.

But it sounds like you want to file in the near future, so this is not a viable option. Your best bet is to talk to a very competent BK and/or Financial planning attorney.

[AngelinaCatHub]

It is a bad idea at this time. You see, if you had had one going fine. But if you intend to file soon, this looks as if you are planning on hiding assets. Retirement is exempt but not if presumed to be fraud to hide assets by design. This is what it would look like this soon to filing. Do this after your bk and you are fine and your bk will be fine as well. 'Hub

[LSUTiger32]

Yeah, the TT told me that anything invested into it in the last 12 month is fair game to him. Luckily he decided not to go after ours since he got a nice payout from our tax refund.

[Mere]

Thank you all, I guess that pretty much answers my questions. I won't be starting a 401k We didn't start one prior to now, becuase we always felt we needed the money...kind of stupid on our end because the end result would have been beneficial in the long run. Live and learn...

[LSUTiger32]

Thank you all, I guess that pretty much answers my questions. I won't be starting a 401k We didn't start one prior to now, becuase we always felt we needed the money...kind of stupid on our end because the end result would have been beneficial in the long run. Live and learn...

You will be through the process and discharged before you know it. Turn that frown upside down! You will be able to start your investing before you know it. Throw an extra 1% or so of your paycheck in there than you were going to do and you'll be in the same position you would have been had you started now. Even better with time!