I wish I would have found this forum sooner. It's nice to see that others have the same concerns/questions. I was wondering if anyone has any advice on 401K withdrawals, and how soon after discharge that this option is available.
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IF you file a Chapter 7 bankruptcy, it is advisable that you wait 1 year after discharge & closing of case..... (you do not want the Trustee to come in and take any funds you have available that you take out of your 401K...
If you are in Chapter 13, if you take funds out of a 401K during this payment plan the Trustee can look at it as disposible income and make it part of your payment plan.
Personally, I would wait till after my bankruptcy is over, discharged, and closed....... especially if it is to be a large sum....
Others might be able to offer some input on this subject also....Minny
"It's amazing the paths that our feet sometimes follow in life".
My suggestions are from "personal experience" and research only. Do not consider this as legal advice. Each bankruptcy case is different. -
i wonder if since the 401K funds were exempt in a chapter 7 if it matters what you take out later. im thinking he has no rights to it. it was exempt.
remember also that 401K withdrawals cost you a 10% tax penalty off the top unless you meet a few requirements, which most dont unless over a certain age of retirement or medical reasons. check into that.Im not an attorney or a trustee. You cant trust me either though!
[x] - Done with 341? Join the 60 Day Club! ___________[x] - Im Discharged! Whoo Hooo!
[x] - Poll: Should I File Pro-Se ____________________[x] - New BK Law: Median Income, Means Testing and Presumptive Abuse
[x] - Zombie Debt Collectors Dig Up Your Old Mistakes _-[x] - Bankruptcy Law Resource
[x] - Need A Fast Answer? Available 24/7!--__________[x] - Dont Be A Hero On Your Budget - You Wont Get An Award!
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Thanks for the advice. There seems to be so many legal attachments to bankruptcy that I'm not sure how one is supposed to know all of it!Comment
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We asked the attorney, and on this one he said something to the effect about filing some sort of form of ~ abandonment~. Seems this will go through the courts also, and we are just not too trusting of some of his advice. I'd love to hear any advice on this one!Comment
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thats why i pay an attorney. but keep looking over her shoulder and beating her on a regular basis.Im not an attorney or a trustee. You cant trust me either though!
[x] - Done with 341? Join the 60 Day Club! ___________[x] - Im Discharged! Whoo Hooo!
[x] - Poll: Should I File Pro-Se ____________________[x] - New BK Law: Median Income, Means Testing and Presumptive Abuse
[x] - Zombie Debt Collectors Dig Up Your Old Mistakes _-[x] - Bankruptcy Law Resource
[x] - Need A Fast Answer? Available 24/7!--__________[x] - Dont Be A Hero On Your Budget - You Wont Get An Award!
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Originally posted by bkfiler
It's exempt as a 401k and under new law it's exempt if it's rolled over to an IRA. If you just cash out then it's disposable income. I read under old law that debtors who rolled over their 401k to IRA's while in bankruptcy lost it as disposable income. Now you can't as long as it's locked up in those accounts.
I still do like this part about the new laws.
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hehe, foolandhiscounterfeitcheck, i meant this for a person that is out of bk and discharged and closed. i think that is what the OP is asking about.Im not an attorney or a trustee. You cant trust me either though!
[x] - Done with 341? Join the 60 Day Club! ___________[x] - Im Discharged! Whoo Hooo!
[x] - Poll: Should I File Pro-Se ____________________[x] - New BK Law: Median Income, Means Testing and Presumptive Abuse
[x] - Zombie Debt Collectors Dig Up Your Old Mistakes _-[x] - Bankruptcy Law Resource
[x] - Need A Fast Answer? Available 24/7!--__________[x] - Dont Be A Hero On Your Budget - You Wont Get An Award!
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Bkfiler,
Remember if the Trustee gets wind of this transaction, he can reopen the case and take the funds withdrawn from the 401K program..... once its out of the 401k program it becomes "disposable income".............
More than likely the trustee will not act upon this BUT if its a sizable amount - he will.......................Minny
"It's amazing the paths that our feet sometimes follow in life".
My suggestions are from "personal experience" and research only. Do not consider this as legal advice. Each bankruptcy case is different.Comment
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Note to BKfiler,
In my case the Trustee will not close my case because he is waiting for me to "sue" the parties involved............ he's just sitting back waiting...........
MinnyMinny
"It's amazing the paths that our feet sometimes follow in life".
My suggestions are from "personal experience" and research only. Do not consider this as legal advice. Each bankruptcy case is different.Comment
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minny, im not sure if the trustee gets that money, it was exempted so its not like he should get it.
also, you mean to tell me that because you said you are going to sue the trustee, mortage etc, that the trustee is also going to wait and take that money too?
isnt that conflict of interest lol - you sue him, you get his money, then he takes it all back again.Im not an attorney or a trustee. You cant trust me either though!
[x] - Done with 341? Join the 60 Day Club! ___________[x] - Im Discharged! Whoo Hooo!
[x] - Poll: Should I File Pro-Se ____________________[x] - New BK Law: Median Income, Means Testing and Presumptive Abuse
[x] - Zombie Debt Collectors Dig Up Your Old Mistakes _-[x] - Bankruptcy Law Resource
[x] - Need A Fast Answer? Available 24/7!--__________[x] - Dont Be A Hero On Your Budget - You Wont Get An Award!
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bkadv,
The "abandonment" your attorney was talking about was that the trustee was abandoning trying to take your 401K since he knew it was exempt in the 401K program - BUT IF YOU REMOVE THE FUNDS - the become disposable income.
The trustee can re-open your case up to one year after discharge..... This time frame allows him to watch for such things as this...........Minny
"It's amazing the paths that our feet sometimes follow in life".
My suggestions are from "personal experience" and research only. Do not consider this as legal advice. Each bankruptcy case is different.Comment
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Bkfiler,
Trustee is waiting to see if he can get his hands on law-suit money to pay more to the creditors........... and of course he gets a percentage also.............
He is also waiting to see if I am going to sue "him" over selling items at auction that he was not authorized to sell....
Also, I am waiting for a full account of where the money went from the sale of the home - also the insurance checks he stuffed in his pocket the day of the auction.....
Should be interesting.....
By the way - even though the 401k is exempt at the time of filing - when they withdraw funds from it - those funds are no longer exempt and becomes a cash asset the trustee can grab.........Minny
"It's amazing the paths that our feet sometimes follow in life".
My suggestions are from "personal experience" and research only. Do not consider this as legal advice. Each bankruptcy case is different.Comment
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Originally posted by Minnymouth
Exactly. If any big money shows up within a year after discharge they can reopen the case.Comment
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Originally posted by Minnymouth
Now that is f'd up! I was wonder why your case is still open even after the title problems. They should just leave it alone.
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