Okay to received 401 hardship withdrawal AFTER 341 meeting, but before discharge?

[bertchic]

Does anyone know the rules regarding this? Is it okay to receive and deposit a 401k hardship withdrawal check before the discharge date?

[discombob1]

I'd be curious about that also...my parents may be facing the same situation.

[JenniG]

This is a good question. I hope someone can answer, as I think my husband and I may need to consider a hardship withdrawal after him being off work for over a month without pay. This question is also similar to another question I have wondered about... what if I get a student loan disbursement before discharge?

[AngelinaCatHub]

For both questions: The consensus is that pulling from 401K is lunacy. Do a search here and you will see, no one agrees unless there is a death-dire need. First, the minute the money is in your hand (after taxes and penalties) it is still part of your estate and you must tell this to your Trustee. You may petition the Court to do this and that would be excused. Same with getting proceeds from any kind of loan. First you should get permission for any kind of loan. If the loan is paid not to you but to the school perhaps that might be OK. However both, need to check with your lawyers. You are both treading on thin ice.

Don't mortgage or steal from your future. You will never make it up. 401K's are wonderful and will grow. Robbing them will never be made up in spades, due to compound interests, and tax exemptions. Only my opinion. 'Hub