Question Chapter 13 Bankruptcy question

[garetjax2002]

A little pertinent information prior to my actual inquiry that will assist you in providing an answer.

I started my Chapter 13 debt reorganization plan on 9/15/2015. My plan ended on 12/15/2020. I received the discharge form 3180W. It clearly states on the form "this order does not close or dismiss the case."

My question is - Am I safe as of now to access my 401K?

I want to withdrawal some funds from a 401K that I had with a previous employer. I deliberately did not roll this 401K account over because I intended on accessing it once my Chapter 13 plan was over. I want to do this before the end of the year because I was effected by COVID and want to take advantage of the waiver of the 10% early withdrawal fee that the IRS/Government is currently offering.

Thank you,
Guy

[justbroke]

For all chapters of bankruptcy (11, 12, 13 and 7), the discharge is a separate event from the case closing. The discharge is the prize. The case doesn't close, however, until the case has been fully administered and the Trustee has filed their "final" report with the court. For Chapter 13s, that final report can take 30-90 days or more before the case is closed.

I don't know if you have an attorney and I generally don't want to give you bad information. Generally, for a Chapter 13, it's better to wait until the close to do anything with property (your 401k is personal property). While I don't think it would really matter to take the withdrawal after the discharge, it's best to run this by your attorney. Your attorney may reach out to the Chapter 13 Trustee and explain it's an emergency due to COVID and just say that they don't care.

Personally, I don't think it's an issue since the (Chapter 13) discharge has been issued. I'm more of the type who is cautious. I just have only seen one question related to this on this forum and it was too soon after the act passed. I still haven't seen much on whether a Chapter 13 debtor is exempted from normally needing to seek permission.