401k's

[danaf]

An earlier thread got me thinking today.

I signed up to contribute money into a 401k. 3% of my pay in order to get the company match. I thought this was protected under bk rules.

But maybe I should cancel it until after bk? What if they consider is disposable income and try to use it to push me into a 13? I don't remember how much it is, but less than $150 a month.

[danaf]

bump...

any thoughts? anyone.....

[PaKettle]

I know you cannot contribute TOO much of your own money, but I would GUESS that 3% of your pay would be protected. Actually I imagine it might not be the % that is important but the AMOUNT that represents.

This is something you would definitely want to ask an attorney unless someone here knows for sure... I don't, I'm just bumping your post so someone might answer who knows...

[needafreshstart]

I'm not sure I follow. If you cancel the contributions it certainly will be disposable income. I would think that would be an acceptable amount to contribute.

[CATCHMEIFYOUCAN]

I had 2 401k plans due to having 2 full time jobs, total contributions added together was about $600. My trustee never blinked an eye. Part of the money going to the 401k were due to loans. The other part were additional contributions: 6% from one job and 6% from the other. Most 401ks are exempt. So if you can contribute as much as you possibly can GO FOR IT!

Catchmeifyoucan

[CindyLou]

My trustee asked when I began contibuting and she did also ask if their was a co. match. Because I had started contributing at the beginning of my employement and it was the minimum to get the max. match, she was ok with it.

I think it varies from district to district...

[danaf]

thanks for the replies.

i think i'm going to look into canceling it for now. I don't think it starts until Jan anyway. i signed up for it, and am planning to file in mar/apr so i don't think it was a wise decision.

better to be safe than sorry.

[jbr12]

What I was told by my attorney was it will only be suspicious if you begin contributing, or increase your contribution, around the same time you stop paying bills. It can appear that you stopping paying bills and then wanted to cover your disposable income by contributing to a 401k plan. The 'acceptable' percentage I was told was 5%... anything beyond that may be considered accessive

[PaKettle]

I heard of at least one case where the person was contributing $400/month to their 401k and the Trustee had a problem with it.

So HHM or someone: What IS the ruling on 401k voluntary contributions? Is it another grey area left up to the Trustees or local authorities to decide? How much can one voluntarily contribute to a 401k and still qualify for a Ch. 7??

[danaf]

I stopped my 401k payments today. They had already started. It was something like only 59 a paycheck. I figure if asked about it I will say that I realized what financial distress I was in and stopped it because I couldn't afford it. This coincides with the fact that I will not be paying on my cc's anymore because I cannot afford it.

I don't know what I was thinking! I know it's not alot but it's starting a 401k at more than $100 a month just a few months before filing and it just looks bad.

[sandhall]

i put 4 % in my each payday and filed and trustee didn't blink a eye. my hubby also put in 4% in his no questions there either

[danaf]

Yes, I get that a low % is probably ok. But not starting it just a few months before filing.

I'm just erring on the side of caution here. After the bk, I'll start it back up again.

[sandhall]

i started mine exactly 90 before filing because that is when i became eligible to

[danaf]

sandhall, I appreciate your information but I've been at this job for a year now and could have started contributing last June. I feel I'm doing the best thing for me right now. but again, I do appreciate your feedback.