:blush2: Sorry, this should be my last ?? for a while! Advise?

[jlynn275]

Not sure of Florida, but here in the 9th they've decided that a 401k loan is not real "debt" since the loan administrator has no "claim". Something like that. But there is a member of the forum, I think her username was LALADY and her employer's rules were such that if she did not pay the loan back, she would lose her job. On that basis she was able to fight for the inclusion of her 401k loan and she won. She had to see three lawyers before she found one that was willing to argue her case.

I think you were well-advised by others on the forum to back the expense out and find a way through without it. One thing that sometimes helps with expenses (& also offers better protection for the family) is to examine your term life insurance policies, deductibles and so on. We raised our deductibles and lowered our coverages (health, auto, everything) in order to save money but it came back to bite us. Better insurance will help you on the schedules and also protect you in the future.

Good luck and keep us posted!

ps. Don't feel bad about posting. The insomniacs need something to do!

Well I won't get fired, but I have tried to cancel the loan TWICE and they said I can't (the retirement company)??!!

[debee]

If they don't allow "hardship withdrawal", you could mention that to your lawyer and see if that changes anything for you or is worth the fight.

If you have the time to revisit your schedules and work through things to make them as simple as possible, with as little to attract the trustee's attention as possible - no 401k loans, expenses within range for your area, etc - that might be worth doing. Even if you think you can win the fight, I wouldn't go looking for one if you can avoid it. That's just my preference though and may not be best for you.

[jlynn275]

My lawyer didn't say the loan would be a problem, but that was just in the initial consult. They do allow hardship withdrawal, but I didn't fall into any of the 6 categories (and still don't now!). I will have to have received foreclosure papers in the mail to qualify...which wasn't the case 3 years ago.

[debee]

I don't think having a 401k loan is in itself a problem. It doesn't prevent or undermine your filing. They're pretty common among people with money trouble.

The problem tends to arise when people try to use the loan repayment amount in order to pass the means test or as an expense item on ch7 schedule J. It's like trying to expense money you are putting into your savings account. Not a 'bill' really. Better if you can make your schedules work without reference to it.