401K & availibility after bankruptcy

[bkfiler]

the 401K thing after the discharge is what im wondering about. doesnt seem right. i cant beleive he gets any of it. case closed already so no dice.

i thought that the case can be reopened only when there is fraud, etc.

for example, if a person gets a much better job making tons of money afterwards then the trustee cant open the case and takae that person into a chapter 13. at least thats the way i understand it.

[FoolAndHisMoney]

the 401K thing after the discharge is what im wondering about. doesnt seem right. i cant beleive he gets any of it. case closed already so no dice.

i thought that the case can be reopened only when there is fraud, etc.

for example, if a person gets a much better job making tons of money afterwards then the trustee cant open the case and takae that person into a chapter 13. at least thats the way i understand it.

No. Any BIG $$$, especially an inheritence they will grab it. Again a small cash out of 401k money should be fine. If someone exempted like 100k and pulled out 50k 3 months later be prepared to give it up. Since this has to be reported to the IRS as income you can bet the trustee will know.


A larger paycheck depends on how large and how long after discharge did someone get it.

Bk, keep the dough under the mattress a little longer before putting it back in the bank. Wait at least 2 years. LOL (just kidding)

[bkfiler]

uh huh, nope. i dont believe this to be true.

it was exempted and not hidden, you can do waht you want with it after the fact imo. i would like to know the truth about this so im arguing it.

i will ask my attorney and see what he says. everyone else find answere too where they can.

if i get a better job paying lots more you think they are going to open teh case and take me to a chapter 13? this is a test question.

[bkadv]

Thanks to all for the advice! Guess we are in for a long wait!

[Minnymouth]

Yes, It's 447 Days And Still Counting Since Discharge................

[Minnymouth]

bKFILER,

The money is "exempted" as long as it stays in the 401K where it was originally. The minute it is withdrawn, paid taxes on, it becomes a cash asset.....

This is one reason that they allow the Trustee to re-open a case up to one year..... Many people would withdraw their 401K programs and buy another home right out of bankruptcy.....

So for one year, you have to be very careful about inheritances, lottery winnings, and retirement programs.... and any pending lawsuits you might have.

Bkfiler, I will double check on this for you also...... the reason I'm certain of it is I have a 401K which is exempt and my attorney advised me not to bother it till my case was closed for at least one year after discharge.....

As long as my case stays in "open status" - he told me to LEAVE IT ALONE........... Even after my case closed (if ever) I will still need to wait one year in the "closed" status before it would be safe for me to withdraw anything from it....

[Minnymouth]

Bkfiler,
In a chapter 13 payment plan, if your income changes drastically, the trustee can "up" your payment to the court just as he can revise your payment to a lower one if your income goes down.......

But if you are in a Chapter 7 case - he would have to petition the court to reopen the case and I don't believe the judge would allow it. But in a Chapter 13, the judge would agree with the Trustee.

Do not under estimate the "long arm of the Court"..... even after your case is closed.

If you take $100K out of a 401K program 2 days after your case is closed - BELEIVE ME - the trustee will go for it - no questions asked.... He will petition the Court, screaming "fraud" and take it.... He will say you kept it protected - till after the case was closed....

Also if you won the Lottery or got an inheritance - he would file a motion to re-open the case stating "cash assets available" and seize what he could to satisfy the creditors....

Its yours as long as it stays exempt up to a year after your case is closed. After that you can do what you want too with it.....

I personally "look" for the Trustee to try to take my income tax refund this year (since my case is still open)... and I have been discharged since Oct 2004.

Time will tell.

[bkfiler]

Do not under estimate the "long arm of the Court".....

minny i HATE when you say that! lol

it gives me the ebbbieeee jeeebies! makes me scared and laugh too! haha

i agree with the lotto if you bought a ticker before hand. not after.

i agree with the inheritence cause they mention it and ask about it.

but for a 401K or a huge salary increase i dont beleive it to be true. i will look into it. my attorney already said its a no go for the job increase regardless of amount. what do you feel about that?

[OnlyBrokeOnce]

So let me get this straight -- Chapter 7 is what I'm talking about.

I file BK, Case closed. 2 weeks later dear old grandpa dies in a car crash and leaves me a bunch of money...it's now up for grabs?

I can understand if dear gramps died before BK filing and inheritance was pending, but the event happened AFTER.

I see the point about waiting awhile on the 401K. But a year? If it's protected, it's protected. After the case is closed, any money that comes my way, should stay mine?!

What if I finally have an upturn in business and start making more than the medium. Can the trustee is come back and say, oops you no longer qualify for the Chap 7, and force me to go Chapter 13?

[bkfiler]

well if granpa bites it then yes the cash goes to the court. that is well defined. thats why thtey ask you if you expect to received an inheratance within 6 months of the filing. they did this because people were filing once they saw their gandpa going downhill.

the 401K im a little suspect about.

[Minnymouth]

A judge will normally not grant a motion to reopen a case due to a wage increase on the job for a Chapter 7.... In chapter 7 ALL debts were discharged, you were not paying into a payment plan on them.
In a Chapter 13, if your income changes, the Trustee has the authority to increase your payments or decrease your payment plan..... If you needed to buy a car, the trustee can change your payment plan to accomodate your new car payment. So if your income increases, he can also increase your payment to the Chapter 13 plan.

Like I said before "DO NOT UNDER ESTIMATE THE LONG ARM OF THE COURT" ---- the Trustee has "rights of the Court" that he can use at any time up till one year after the case is closed.

I did not think they had the "right" to take my home because the mortgage company failed to record the title correctly - BUT THEY DID - IT GOT SOLD - AND I HAD TO BUY IT BACK...........

THEN is when I got educated in the "long arm of the court" and what they can and can't do!!!! And I was amazed at the rights they have and what they can do - NO MATTER WHAT THE CIRCUMSTANCES.

They even "sold" and 16 x 40 foot storage building that was sitting on my property THAT DIDN'T BELONG TO ME.......... How's that???

[Minnymouth]

Once you have a "closed" chapter 7, the case is closed unless the Trustee finds assets - an inheritance, lottery winnings, etc. If you income increases, NO they cannot touch it....

But if your in a Chapter 13 - Yes they can...

They cannot make you change from a Chapter 7 to a Chapter 13 AFTER THE CASE IS CLOSED - UNLESS - the Trustee finds assets and files a motion of fraud, etc.

This is why most conversions to Chapter 13 take place after the 341 meeting and before discharge....... it's normally not done after discharge.........unless fraud is found.... then they can........

[OnlyBrokeOnce]

So much to learn.

Well this much for sure. Will put FIL in a protective bubble for a year after the BK. And dear granma better make it to 96!

[bkadv]

Whew! I guess I learn something new everyday where this bankruptcy is concerned.

[bkfiler]

So much to learn.

Well this much for sure. Will put FIL in a protective bubble for a year after the BK. And dear granma better make it to 96!

ROFLMAO - protective bubble lol hahaha

they gonna ask why you wrapping all the sharp corners in their home with padding!