Deductions allowed for 401k contributions

[aa06a47]

The hit will be considerable - probably around $2,000 - so then our lawyer files a modification to our plan to pay that off. Either way the trustee doesn't get any extra money from us - it's just that our district would like to get this issue settled for the future by forcing our judge to make an official ruling. Will keep everyone posted on how this goes.

I would verify this...doesn't sound correct that new debt could be included in a bankruptcy that has already been filed. You will not incure that debt until you default on the loan.

Are you paying the loans through direct payroll deductions?

[lrprn]

I would verify this...doesn't sound correct that new debt could be included in a bankruptcy that has already been filed. You will not incure that debt until you default on the loan.

Are you paying the loans through direct payroll deductions?

The new tax hit wouldn't be included in the bankruptcy, but it is a secured debt that must be paid by us. It's in the same boat as paying a new medical bill that is incurred after filing. Our lawyer and trustee will work out how to accommodate the payment - could be by skipping two months of trustee payments, could be by reducing the amount we pay the trustee for a certain amount of time and applying the extra to the loan debt. Whether a formal plan modification will be required depends on the degree of payment 'hit' and how long it lasts.

Agree that we are hoping for option #1 and that is what our lawyer will fight for if we don't get to keep everything at the current contribution and payment levels. Until then, it's heads down and keep making our current payments on time to the trustee.

And no - no payroll deduction. We are allowed to make our payments directly to our trustee by personal check each month. My husband hand-delivers it to our trustee's office to ensure it gets there on time and gives it right into his head administrator's hands.

[$$only4ever]

Really glad that you were both able to continue to contribute to your 401Ks at your current levels! My husband and I are both older than you two are (we're 55 and 61 and paying 5% each - we reduced to 5% on our lawyer's advice since he knew our trustee would only allow 5% each) - however, our trustee actually filed an objection to our case based on our 401K contributions. He's lumping repaying my husband's ill-advised 401K withdrawal 'loans' with both our contributions which puts us over the allowed 5% each. Despite a pre-trial conference with the district bk judge, the trustee and our lawyer can't agree on a compromise.

Since we're the perfect test case for this plus our mismatched Schedules I and J totals which is causing a disagreement about what our monthly payments should be (the other trustee objection to our case), we are headed to court for an official ruling by the judge in a few months....sigh. Are we nervous as cats in a room full of rocking chairs? You betcha! :/

I hope everything goes well for you. As bad as all of us that filed under the "old law" felt, I really feel that everyone under the "new law" are playing a new game. Unfortunately, there will be more testing of the waters as new situations arise. Again, good luck. I hope that everything works out for you.

[BKnightmares]

401k contributions

Great deal for those under new laws. We filed in 2003. No contributions allowed to 401k (that was expected). Two loans under 401k forced to default(that was not expected). Poor advise from lawyers there. Hanging on by fingernails to finish payments by end of year. Have incurred an extra 12000 in expenses during plan with no relief from trustee-What an @#$hole. Good luck to all of you.