New 401K contributions after filing Chpt 13

[diggy]

I have not been able to contribute to a 401K plan for the past 3 years due to having to use all my monies towards bills and mortgage. If once my Chpt 13 repayment plan is confirmed and I find that I am able to put away even a small amount towards a new 401K plan (not an existing), will the trustees allow for this?

I'm reading on the boards that it depends on the district and some may view contributions as monies that can be used towards paying toward the plan... but what if you are just looking to rebuild your nest egg and retirement (start from scratch)? I do not have any existing 401K plan (wiped it out years ago when I took a loan against it to buy my first home which will now likely go into foreclosure). Is this allowed? I know having a savings account is allowed but obviously the returns aren't as high. If I have to wait after 5 years, that will mjean a total of 8 years of not having anythign towards a 401K plan... ugh

Thank you

[BubbaGump]

When I filed my Chapter 13 they looked at the six-month lookback period in terms of the amount of contribution to the 401k. Contribute the absolute maximum (if that's allowed in your jurisdiction) to the 401k during the six months prior to filing and you can help minimize the amount you'll get stuck having to pay on the 5-year plan. Keep contributing to the 401k and you'll have some tax-deferred savings when you're done with it, or if you run into a bind you can cut the contribution rate with your employer for a month or two to help get through.

[diggy]

Thank you Bubba but you misunderstood the question...

I have not been contributing to my 401K AT ALL in the past 6 months. I have already filed Chpt 13. My 341 meeting is set for December and I already sent in my proposal for repayment. My repayment begins this month.

The question was if after my 341 meeting and the trustee agrees to my plan, I find that I am able to contribute again to a new 401K plan (after not having done so for 3 years prior), will it be allowed under the Chpt 13 plan as long as it's a reasonable, allowable amount (like say $50-100 per month)? I highly doubt I will be able to do the yearly maximum but any little bit helps to rebuild the retirement plan.

Anyone know?

[BubbaGump]

You might be stuck. I was told that I couldn't increase my 401k contribution rate (I had about $500/year of room to go up) once I filed, and have it be recognized. Your district/trustee may be different - ask your attorney before you get too far into the process. Perhaps voluntarily withdraw your petition, contribute 2x what you want to be able to contribute monthly once you're confirmed for 3 months, then file again?

[Flamingo]

You need to ask your attorney directly on this question...sorry, but it varies for everyone.