Ch 13 and Retirement assets

[unclerico]

Hello...

Well we have 11 months to go on our 100% payback! I asked my atty about petitioning court to get my retirement funds released so I could nearly end the bk. Currently the retirement plan admins say that a ch13 bk is not a hardship and therefore I cannot take a hardship disbursement. I asked my attorney about getting a court order to get the funds released to the trustee but he says the court has no jurisdiction over these funds. Any ideas about this? My attorney recommends lowering my plan payments to stretch 5 years which I don't want. Of course he would get more money from fees if I did this.

[despritfreya]

Your attorney is correct. If you do not meet the requirements under ERISA for a hardship withdrawal you cannot withdraw the funds based upon "hardship". The bk court has no authority to order anything as it relates to this issue. I would imagine you could attempt to take out a loan from the retirement plan but could not say if such would be advisable.

Des.

[unclerico]

Ok, that's kind of what I thought. My contract job with a hospital is going away after the first of the year and I was offered a position at the hospital. It's a slight pay cut. Am I correct that if leave my job to go direct I would get my retirement funds anyway? I will no longer be employed by the same people.

[IamOld]

unclerico - depending on your plan at work - but yes, most of the time if you leave an employer you can take the funds out - BUT remember you'll have a huge tax bill AND if you are not yet 55 then you'll pay an extra 10% fed penalty tax.

if you're 55 or over you can withdraw $$$ from the 401k/403b etc of the employer that you are leaving.

After 59.5 any 401k you can make withdrawals w/out the penalty tax BUT you still have to pay regular tax