401k loan repay in NY for CH 7??

[happy_ira]

I'm confused and I've read a few posts that seem a bit confusing: can I yes... or can I not deduct 401k loan repayments in my Form 22A (means test)? I live in NYC.

For what I've read here, the Trustee will add back any 401k loan repayment that I included (which unfortunately for me is hefty at $1,243 per month!). Note that ff I leave the job tomorrow, I would be forced to pay it all back. The loan repayment is involuntary. Still, from what I now know, that's just too darn bad acc to a Trustee who would dub this disposable income.

Help.

Am I correct or wrong in NY?

[BKParalegal]

It is confusing because it can vary by district. It is the interpretation of some trustee's that repayment of a 401k is not a necessary expense and they can and have stopped the repayment of the loan even though there will be tax repercussions. Although, I hate to sound cliche, you need to ask your attorney about how it is handled in your district.

Good Luck

[happy_ira]

I'm going to re-check with my atty ASAP. What if he says that upon further review I might be correct?

My petition was filed last week and a hearing date has been set (Sept 23). Can the paperwork be "pulled" and the hearing date cancelled so that I can file new paperwork with corrected (more iron-clad) deductions to pass the means test?!

[BKParalegal]

You can amend the Means Test and Schedules I and J to your hearts content.....just have to pay the attorney

[happy_ira]

You can amend the Means Test and Schedules I and J to your hearts content.....just have to pay the attorney

Do I do the amending BEFORE my hearing date or afterward? Obviously, I'd like to get everything correct before I go into my first hearing and I dont want the Trustee to see incorrect info. Thanks.

[BKParalegal]

I amend based on if it will help me or hurt me at the 341. Inevitably you want to file the correct information, but you get to time it when you should file it.

Good Luck

[happy_ira]

I amend based on if it will help me or hurt me at the 341. Inevitably you want to file the correct information, but you get to time it when you should file it.

So let me make sure I understand this as it played out for me.

I filed the initial petition in mid-August. I then realized that a) couple unforeseen events took place within a few days that changed some line items and b) I wanted to also correct some information. So, I filed an amendment prior to the 341.

Is it correct that the Trustee will use the initial petition and then insert the amended pages? I mean, the amended pages override the old incorrect ones, yes?

[BKParalegal]

You are correct, the amended document, trumps the original.

Good Luck

[momof5]

You will not be forced to pay it back if your employment terminates with this company. What happens is it goes into default and in turn whatever is outstanding will then be considered a withdrawal and no longer a loan. Come tax time you will receive the paperwork to claim that amount and to pay the taxes that we get whopped with.

My husband lost his job in February and we had 2 401K loans. One that had $7,000 left to be paid and another for $1400. We received the notice that it was due immediately. Of course we could not pay it as is the case with most who have lost their employment. I will be able to finish this story in January as I am terrified of the tax consequences.

On our schedules, our 401K holder is listed as a creditor but the amount shown is $1.

I am in NY as well.