Are 401K contributions....

[gak555]

considered to be an expense that you can include in the means test ?

[aa06a47]

I don't think they are.

[Jessika1012]

How about on your schedule I? This does come out of both of our incomes, so I am hoping this is an expense for the schedule?!!

[LostOne0069]

Nope, I asked our attorney about it... 401k loan repayments can be included, but they expect you to pay your creditors before you start putting more money in your 401k. They'll make you stop contributing.

[cr2285]

It can only go towards means test calculations if the contribution is mandatory on your part. (i.e. Texas teachers retirement)

[Jessika1012]

Question

When are you able to start this up again?! I am so confused. I guess I don't understand this at all. I guess that was our only way of making it into a chapter 7 too Now I am really worried!

[aa06a47]

In a chapter 13, I have read that unless it is a 100% payback plan, contributions to the 401k cannot be made as all disposable income must go to the plan.

http://www.bankruptcyhelponline.org/2005/09/27/can-i-contribute-to-my-401k-or-403b-retirement-plan-while-in-a-chapter-13-bankruptcy

[Jessika1012]

This seems to hold true for just Chapter 13. I am curious about Chapter 7's. It's a confusing subject.

[LostOne0069]

When are you able to start this up again?! I am so confused. I guess I don't understand this at all. I guess that was our only way of making it into a chapter 7 too Now I am really worried!

This is WHY they aren't allowed... if it was allowed, people who made plenty of money to pay into a chapter 13 would just pump up their 401k contributions to the max and then file a chapter 7 bk. NOT that I'm saying YOU are doing this... just that this is the reason they don't allow it... your income not needed for living expenses is supposed to go to creditors... not your savings.

Now, as to the chapter 7/13 thing... do you make above the median income for your state/family size? If so, have you looked through the means test to see where you might not be currently spending the max allowed in all categories?

[Jessika1012]

We are above our state's median income (don't know how--we don't have much), but we are definitely negative on the means test. I am sure there are other ways to find expenses that we didn't even think of yet. We are just trying to figure out where we stand. Those are a bit confusing as well.

[aa06a47]

I believe if you file chapter 7, at least in my state, you must pay back any money put in a 401k plan for like 6 months. Not sure if that is true where you reside.

As far as after the date you file you file a chapter 7, it is what it is, do with your money as you like, however, you might want to wait until the discharge to start socking 20% into your 401k plan.

[djk]

I believe if you file chapter 7, at least in my state, you must pay back any money put in a 401k plan for like 6 months. Not sure if that is true where you reside.

As far as after the date you file you file a chapter 7, it is what it is, do with your money as you like, however, you might want to wait until the discharge to start socking 20% into your 401k plan.

after a discharge, it's best to wait at least 180 days from the date you filed before you celebrate (if you do)

[SinkingFast]

Now I'm confused.

Hubby just became eligible to contribute to his new company's 401K plan. Effective April 1.

We specifically asked the attny about signing up for the plan and making contributions. Our attny said it would help to have money going into the 401K.

[FoolAndHisMoney]

After a chapter 7 discharge the FIRST thing that should be done even before a 401k contribution is establish a reasonable emergency fund. This will simply help in emergencies so you won't have to relive this God awfull process again in 8 years. Maybe put the emergency fund in a savings that offers a secured credit card so you have emergency funds and can rebuild credit at the same time.

After this the tax benefits of a 401k is the next best thing. ;)

[inseriousdebt]

?

What state are you in, SinkingFast? I am confused about this as well with a chapter 7.