401K money

[gophermn]

Hi all, I posted this in the General BK forum but no response.
Is 401K funds protected or exempted for the trustee to take?

[danaf]

yes, i believe so

[Flamingo]

401(K)'s are exempt; however, you will be asked if you have one (the information will show anyway on your paystubs) so be prepared to provide the information and will be asked if you have any present loans against your 401(K).

[gophermn]

What if we do have loans against the 401K? Does that change the game?
I know my attorney has the 401K loans listed on the petition.

Thanks all~

[Flamingo]

What if we do have loans against the 401K? Does that change the game?
I know my attorney has the 401K loans listed on the petition.

Thanks all~

You are still responsible for the loan (you can only have one loan on a 401(k) plan). In our Plan, I had one small loan against my 401(k) ($1300) and payment of that loan out of my paycheck continued as normal and was instructed as such in our Plan. The loan was included in our Chapter 13 but was to be paid back in in full outside of the Plan payment.

[CATCHMEIFYOUCAN]

Hmmm.

When I filed I had 2 jobs, thus 2 401k plans. I had a 12,000 loan from one plan and I was paying about $125 a month from my pay check to the plan plus socking away an additional 6%. The 2nd job I had a 1,000 loan paying about $15 a month from that paycheck and socking an additional 6%. All in all, the Trustee saw I a total amount of $600 going towards the plans automatically deducted from my paystubs. My plan/loans were protected and the Trustee didn't ask me to reduce that extra 6% I was socking away in both jobs. The loans itself must be paid back via payroll. That is just one way to reduce disposable income.

Catchmeifyoucan

[Flamingo]

Hmmm.

When I filed I had 2 jobs, thus 2 401k plans. I had a 12,000 loan from one plan and I was paying about $125 a month from my pay check to the plan plus socking away an additional 6%. The 2nd job I had a 1,000 loan paying about $15 a month from that paycheck and socking an additional 6%. All in all, the Trustee saw I a total amount of $600 going towards the plans automatically deducted from my paystubs. My plan/loans were protected and the Trustee didn't ask me to reduce that extra 6% I was socking away in both jobs. The loans itself must be paid back via payroll. That is just one way to reduce disposable income.

Catchmeifyoucan

You are lucky that you got away with not having to stop the 6% of your income savings into your Plan. The attorney/trustee usually asks for/requires a breakdown of anything as to your 401(k) plan as deductions are clearly listed on paystubs. Most people prior to filing eliminate their savings deductions into their plan to give them more income to survive on prior to filing. That is what we had to do when my husband lost his job cause having 70% of your income disappear makes you scramble. However, in my situation, I asked our attorney about two years into our plan if I could take advantage of my new employer's plan and go back to trying to save something inasmuch as I was losing free money through my employer and thought I would be able to cover 1% of my salary with no problem. I was given permission to save a small percentage with the stipulation that if it caused problems in paying my other bills or the Plan payment, I would have to stop. I started with 1% and each year there after increased it with each raise. Since discharge I am at the full 6% mark and they match my savings to 3% and 50% thereafter to 6%.

[lorine]

Trustee objects to claimed exemption of 401k

Trustee has objected to our 401k exemption claim in Chapter 13. We have to provide a specific Missouri or Federal Statute which currently exempts funds. What do you think?

[HHM]

Are they objecting to the balance in your 401K, or to you claiming your 401K contribution as non-disposable income.

It might just be a technical objection, the forms do require that you cite the specific statute to claim an exemption, thus, if you failed to mention the exemption specifically, the trustee may object.

[shadowb]

Are contributions to 401K protected. My trustee is sucking all my money. My paychecks are down to zero. Half my benefits this pay period weren't paid. I live in Louisiana. Does anybody know what the law states regarding 401K contributions? I have tried researching this.

[Flamingo]

Are contributions to 401K protected. My trustee is sucking all my money. My paychecks are down to zero. Half my benefits this pay period weren't paid. I live in Louisiana. Does anybody know what the law states regarding 401K contributions? I have tried researching this.

Contributions to a 401(k) plan are not protected; the money that is already in your 401(k) plan at the time of filing is what's protected (exempt). 401(k) contributions are voluntary and since those funds are available to be paid toward your plan, you will probably have to stop contributions to your 401(k) during your Plan. You may be able to resume them later on but check with your attorney first.

[samantha625]

Are contributions to 401K protected. My trustee is sucking all my money. My paychecks are down to zero. Half my benefits this pay period weren't paid. I live in Louisiana. Does anybody know what the law states regarding 401K contributions? I have tried researching this.

My attorney suggested that we keep contributing as much as possible to our 401k and Ira's. We are in NY

[Flamingo]

My attorney suggested that we keep contributing as much as possible to our 401k and Ira's. We are in NY

Are you or have you filed Chapter 7? That's why....Can be quite different as to a Chapter 13 since plan payments and disposable income are involved for several years after filing.

[woeisme]

My trustee allowed payments to retirement plan, but only allow amounts that are required to get employer match. My empolyer requires all employees to put in 5% to the plan, then they put in 9% (which is a great deal!) so the trustee had no problem with my 5% going in (or my husbands, which wasn't required, but they do match the first 5% of his, so was allowed to keep making that payment, but not any additional funds over 5%). So I think it's another one of those "trustee-dependent" cases, maybe allowed, maybe not.

[duplantisjj]

I must have got lucky! I take out 10% of my bi-weekly salary into my 401K which ends up being about $570. My employer matches 5%. It was all on my check stubs and the UST didn't even look twice at it and moved on. I was really worried because it would change my sch J to a positive number instead of $-487.