can take a 401k loan before you file for car repairs?

[debthlp]

Does anyone before we file can we take out 401k loan to pay for lawyers fee and pay for car repair before filing for chapter 13?

[starr4law]

Technically, I believe that the answer is yes. However, it could really muck up your case. 401K loan payments are usually included (or at least in this district) in the means test. So, let's say that your payment was supposed to be $500/mo in your Ch 13, but by taking the 401K loan, it is now $300/mo. You received the benefit of the 401K loan, and your creditors are "hurt" by doing this. On the "eve" of bankruptcy filing, this could be considered a "no-no."

If you haven't met with an attorney, now would be a good time to do that. They usually know what the Trustee will allow in your district as far as how you can get funds for paying the atty fee (some districts don't care if you sell stuff, others do, etc.).

[walkthaplank]

My lawyer said that last minute 401k loans are looked upon with great suspicion and might cause you lots of unwanted trustee attention.

[jmac]

I was told by my case worker its ok, to take one for my daughter college fund which i didnt do. But i plan on taking one to start my 13, that or get garnished soon really dont have a choice.

[vicmost]

My lawyer said that last minute 401k loans are looked upon with great suspicion and might cause you lots of unwanted trustee attention.

I took one in Dec 2009 and should be filing August 2010...I hope that's not an issue.

[starr4law]

8 or 9 months in between? In the bankruptcy world, that's a long time Don't worry about it.