Pension Loan for car

[breakingfree]

I've been reading through for a while now, but this is my first post. DH and I filed ch 7 last week. We decided to surrender our minivan since we are upside down by 4k and the payments are too high. Also last week the front suspension broke and we didn't fix it. So it is sitting in our driveway, we put a call in to the bank to come and get it, they said someone will call to schedule a pick up. Problem is we have 3 kids in carseats and they don't fit in the back of DHs corolla (which we are keeping...no equity, we owe what it's worth).

Our plan is to take a loan from DH's pension. No credit check, if the money is there we can borrow. We are planning on taking 5K, using 4K for a used van, putting rest in savings for emergencies since it might need some work/tires. Does anyone see any problems with this plan? Should we wait till the 341 on 1/8? Since we already filed do we still need to keep the car's value under an exempt amount of equity? Will the 1K in savings also be a problem? I am going to ask atty again next week, but he is so easygoing sometimes I get worried (I am paranoid I think). I am in Pa if that matters. TIA

[shabam]

I would not go buying or borrowing anything without first consulting with your attorney. Any money you borrow from the pension, may be considered an asset and taken from you.

In my personal opinion, do not touch your pension. If you absolutely have to and it's your last resort, I would wait until you are discharged to be safe.

[breakingfree]

Really can't wait till discharge, since it won't be till at least March and I have no way to safely take my kids to and from bus stop and preschool and absolutely no way when my husband goes to work. We asked our atty when we went in for final paperwork and he said it was fine as long as the car was around $3500. I have just seen comments on here that kind of contradict what he says, so I just get nervous. Thanks for replying.

[justbroke]

I would sit down with your attorney. He can help you decide the best course of action. Since you are pre-discharge and haven't even been to the 341 Meeting yet, I wouldn't take any action without speaking with your counsel.

So long as you can pay back that 401(k) loan (not withdrawal/distribution) this may not be an issue, but it's more a financial management... financial planning question.

[breakingfree]

It's not a 401K, my huband works for the state and it's his retirement pension (not sure the difference). We've borrowed from it before, it's paid back within 5 years with automatic payroll deductions. The amount would be significantly lower than our current car payment. He is also not going to retire any time soon...he still has 13 years before he can and he is only 33.

[justbroke]

Again, I think you're okay. Your plan may be a 403(b), but still the same. He's young enough, that I'm not overly concerned that he's close to retirement and playing with his funds. I would still recommend speaking with your attorney and financial planner.