IS 401k hardship withdrawl included in income?

[bkondeff]

My folks pulled $12k out a few months ago to keep up with payments, would that be included in the 6 mo lookback?

[StartingOver08]

Yes, if the date falls within the 6 months prior to filing. Hopefully they can wait to file until the extra $12k drops off the look back period.

[backtoschool]

Yes that 12k will be considered income on the means test. Any cash that is left over and still in their bank account will have to be exempt as well.

[justbroke]

Yes. The calculation of "current monthly income" (CMI) is based on income received from all sources in the last 6 months. The reason why it's income (even though it's your money), is that it was deferred income... to be paid later.

[Heli]

Hrmm well there seems to be conflicting answers to this question, according to this post http://www.bkforum.com/showthread.php?t=38992 they do not. Also after speaking with my attorney he seems to think they do not either, of course your mileage may vary. The topic is of interest to me and even though my attorney said it would not it is still of concern as I am in the same boat as the OP's parents.

[justbroke]

Hrmm well there seems to be conflicting answers to this question,

I should have added my standard disclaimer. This varies by District, but the majority includes it as income. Hopefully there will be something other than a Bankruptcy Appellate Panel (BAP) ruling, because those "may" not be binding on the Circuit. It needs to go to a Circuit court of Appeals to have "real" and lasting affects.

The Supreme Court, of course, would make it binding precedence everywhere.

[Heli]

I have a feeling I'm going to need to have a good sit down with my attorney over this when I get all my paperwork together. During the initial consult I was uneducated to allot of things until I stumbled accoss this site. Doing alot of reading and not jumping into filing until I'm ready is my motto at this point

[overspent]

[ace13]

My attorney advised me that my one time withdrawal of 3,000 in July was not income and need not be included.

Just offering my experience...please take no offense anyone.

[justbroke]

My attorney advised me that my one time withdrawal of 3,000 in July was not income and need not be included.

This is what we want. We want it to be consistent in that it shouldn't be included as income. Anyone with this issue needs to check with their attorney or local practices on the issue.

[ohnoyadidna]

Any official update on this? I just took a withdrawal and was planning on chapter 7 in december. Now I may have to push that off 3 months if it's included.