When Can I Liquidate IRA?

[want2save]

I've filed Chapter 7 in OR. My hope is to after I'm discharged sometime in Sept, to apply for a Reverse Mortgage on my home so that I can live on my Social Security. To do this I must pay off my HELOC 2nd mortgage with my IRA so that I can qualify. Otherwise I owe to much money to do the RM.

May I liquidate after discharge or must I wait for closing? Mine is an asset case and there is an auto and an RV which the Trustee will be taking and selling. The sooner I can get the Reverse Mortgage the better in the event interest rates spiral up again.

[jribe]

I've filed Chapter 7 in OR. My hope is to after I'm discharged sometime in Sept, to apply for a Reverse Mortgage on my home so that I can live on my Social Security. To do this I must pay off my HELOC 2nd mortgage with my IRA so that I can qualify. Otherwise I owe to much money to do the RM.

May I liquidate after discharge or must I wait for closing? Mine is an asset case and there is an auto and an RV which the Trustee will be taking and selling. The sooner I can get the Reverse Mortgage the better in the event interest rates spiral up again.

you need to wait for closing. If anything happens- your IRA will no longer be exempt and if you haven't been discharged it could be taken.

BTW- interest rates won't be rising anytime soon.

[HHM]

Whoa, let's back the truck up for a second.

How much is your home worth. How much do you owe on the first mortgage?

I would strongly advise against liquidating your IRA for this purpose. I assum you probably have a Roth IRA, which means retirement withdrawals are tax free.

[want2save]

When Can I Liquidate My Ira?

The home was worth $450 before the "bubble burst" Now it is worth $330. My first mortgage is $160. I"ll be paying off the 2nd of $149,000. I cannot make the 1st mortgage payment on social security. Unfortunately, the pain of my spinal stenosis is now making it very difficult to walk and I am not able to work. Without a mortgage payment I can live very comfortably on the ss. I have no heirs to leave an estate to and wish to continue to live in my home.

The answer before yours mentioned closing and discharge interchangeably so I still have not had a response to my question!

[jribe]

The home was worth $450 before the "bubble burst" Now it is worth $330. My first mortgage is $160. I"ll be paying off the 2nd of $149,000. I cannot make the 1st mortgage payment on social security. Unfortunately, the pain of my spinal stenosis is now making it very difficult to walk and I am not able to work. Without a mortgage payment I can live very comfortably on the ss. I have no heirs to leave an estate to and wish to continue to live in my home.

The answer before yours mentioned closing and discharge interchangeably so I still have not had a response to my question!

you need to be discharged

[AngelinaCatHub]

I would also wait till closed. I am an asset case and it is now more than a year from discharged band we still are not closed. 'Hub

[want2save]

When Can I Liquidate IRA?

Thanks for the responses I'm getting.

My assets to be liquidated are a car and an RV. I would think the Trustee would just wholesale those and that they would be gone very quickly and any funds distributed. Does that sound like it could take a year to close the case after the discharge?!?!?

[music12]

safest to wait for closing. but whether even then doing this is a good idea i really don't know.

[Tbornetun]

If the house is worth $330k and you owe a total of $309K, can't the RM pay off both loans and you could then keep your IRA?

[HHM]

ultimately, this seems like a wash.

I guess, big picture, not having a mortgage payment is helpful

[LuciluS]

Are you retired and receiving Social Security or disabled and receiving Social Security and not of retirement age. I ask this because I receive Social Security Disability and I'm only 55 yrs old.

In my case, liquidating an IRA would cause a 10% penalty and additional taxes for my 2009 Tax Return. And also, depending on the type of IRA adn $ amount, you might possibly have additional taxes to worry about on your 2009 Tax Return.

Just wanted to mention this. I have no clue on waiting until discharge or closing as dh and I have not filed our Chapter 7 yet.

Luci

[want2save]

When Can I Liquidate IRA?

Reverse Mortgage loans require huge equity so I need to pay off the HELOC to receive one. I need to eliminate all housing costs other than real estate taxes and homeowner's insurance in order to make it on my Social Security. I'm grateful I have the exempt IRA to make this happen. I am nearly 68 and will have no withdrawal penalties.

So, the question remains, may I withdraw at DISCHARGE or must I wait for CLOSING??

Thanks all.

[HHM]

Most conservative, closing

Most practical, discharge. At discharge, any property of the BK estate that has not been specifically retained by the trustee for distribution to creditors, reverts back to the debtor. So, practically speaking, you can withdraw after discharge.

[want2save]

Thank you HHN. That makes excellent sense to me.!!!

[music12]

Most conservative, closing

Most practical, discharge. At discharge, any property of the BK estate that has not been specifically retained by the trustee for distribution to creditors, reverts back to the debtor. So, practically speaking, you can withdraw after discharge.

that makes a lot of sense. does the trustee have to say specifically what property he is taking prior to discharge? it's not enough for him to just say it's an asset case and deal with it even after discharge? is there a rule about this?