IRA Distributions??

[birdo]

Just wondering about IRA distribution.... We have had or case deemed a no distribution and are in the 60 day club...:0) We have had an unexpected expense come up for about 1000.00 dollars. Can we take a distribution???? We only have about 3000.00 left in it since we had to use most of throughout the year to live on. :0(

[daylate]

I think the technical answer is no...which came as a surprise to me-since your IRA is exempt I don't logically know why you shouldn't but I don't think you can-that being said if you have an attorney I'd have them petition the trustee for permission-I've been told and read that trustees will usually allow-but as always jut because one does another might not. I'm sure others will chime in with more input.

[birdo]

Thanks for the info..... better to be sure :0)

[debee]

No distribution means there is nothing to distribute to your creditors. Your IRA is exempt, so long as it remains with the financial institution. As soon as you take it out, it becomes available for distribution to your creditors.

[birdo]

So pretty much till we are discharged we can't take a distribution? Or for how long? Thanks for the input. :0)

[debee]

Discharge. At that point any assets that the trustee has not specifically retained are yours again. Sorry about your unexpected expense and the drain on your IRA. Hope the future is bright as a sunflower.

[debee]

I think I was wrong when I said you had to wait. If you have a lawyer, call your lawyer and ask. If you don't, call your trustee and ask. Good luck!

[debee]

Hey birdo,

I heard from another forum member (via pm) that their lawyer told them not to make a withdrawal from their 401k until discharge. The lawyer was concerned that the trustee might try to go after the money.

And from what I understand, the trustee has until 30 days after the 341 meeting to object to your exemptions. One lawyer's post (that I read on another site) suggested that that was the deadline to watch.

Will you post after you talk to your lawyer to let the rest of us know whether you were cleared to pull money out of your IRA?

[birdo]

Hi debee, I did talk to my attorney and he said it was ok to take a 401k (loan) that gets paid back to myself through my paychecks. He said because our case was deemed no asset/no distribution my 401k was protected. He did say do not take a cash distribution or "cash out" until we are discharged. He said the (loan) however was considered a post filing debt and would not be subject to discharge. We would not even consider this but had an expensive home repair and don't have another option.

Thanks for the input :0)

[debee]

I'm glad it is working out for you. Thanks for posting back the result! It will help people to know your experience.