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Is Husband's 401K Vulnerable?

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    Is Husband's 401K Vulnerable?

    I filed ch. 7 and had the 341 meeting yesterday. The trustee asked how much my husband had contributed to his 401K since we've been married (the past 4 years). I didn't know the answer and he didn't ask us to report on it later or anything.

    We live in a community property state. My husband is not filing bk - just me because of a very bad business venture.

    Could his 401K be vulnerable? I thought retirement accounts were exempt? I would think especially if it is not the debtor's. Now I am very worried and annyed.

    My lawyer did not know why he was asking this or what he could be trying to get at, and now she is on vacation for a week, so I'm left to stew over this.

    Anyone have any knowledge or experience with 401Ks and bk or community property and 401K?
    A.O.

    #2
    As far as I know 401K is exempt. He could be looking to see if you dumped your money into his 401K I could be wrong hard to tell what a trusty maybe thinking
    Chapter 7 07/30/2008
    341 09/17/2008
    Discharge 11/21/2008

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      #3
      401ks are exempt. It is very strange that the trustee would ask this. I mean - I could see a trustee asking if someone totally upped their deduction right before bk in order to show less disposable on the schedules. Otherwise, they are hands off to the trustee. I wouldn't worry too much about this, especially since he didn't ask for any follow-up information.
      Filed Chapter 7 Pro-Se May 29, 2008
      341 July 1, 2008
      Discharged September 4, 2008
      Closed November 10, 2008 :-)

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        #4
        Thank you for the posts so quickly. Your suggestion actually makes a lot of sense. I think my bk is going to get scrutinized in this way because I am now employed at a good income, we live in a high-income area, and my husband and I both work for a company in which people outside the company assume everyone who works there has a lot of money (not the reality).

        So in a weird way, it makes sense that he might think we moved assets to the 401K on purpose. That was not the case at all (my husband has been dutifully making his contributions gradually over 15 years) and I liquidated my 401K to pay for my failing business, so we can prove that if he were to pursue this further.

        Thanks for the verification that the 401K is exempt! I'll sleep better tonight.
        A.O.

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          #5
          The 401K, itself, is exempt. The questions is not that strange, as has already been pointed out, the truste is trying to see if you dumped otherwise non-exempt assets into the 401K. And since you are community property, half of what went in during the time you were married is technically yours.

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