I think I know the answer but your thoughts are appreciated.

[deepinit]

I am in an active Chapter 13 almost half way through a 60 month plan and I have a strange situation ahead of me. I am going to be getting access to a retirement account that comes from the sale of a business that I used to work for. I will be getting just under 80k and it will be paid directly to me or deposited into my current IRA or 401k whichever I choose.

I have several needs right now, my home needs a roof and foundation repairs, I need a new car because mine has 300k miles on it and is not doing well and my property taxes are due, and it would just be nice to have some savings cushion!!!

I called my attorney last month and told him about this, none of this was in my plan because this money was not ever guaranteed and it was part of an employee stock option program that for years had no value but when the company was finally sold, my shares turn out to have value. he said that we could file a "motion to retain "and keep a portion of it if I were allowed.

My question is, how would they ever know if I took 15k out and deposited the rest in my IRA? My trustee doesn't require my taxes each year, only spot checks them. I am torn because it's not like I'm taking a vacation, I have household needs that I need to take care of and I really don't feel like petitioning a trustee and have a flag raised and go through the wringer only to here the word "no".

And yes this was an ERISA qualified plan so it is a legit retirement plan.

Like the title says, I know the answer but really wanted to vent and get any ideas.

[LadyInTheRed]

Regardless of how they find out or whether they find out, nobody here is going to tell you to keep the cash and not report it to the trustee as advised by your attorney. Is the risk really worth jeopardizing your case?

If the stock options were in an ERISA qualified plan, then they should be exempt. Was the plan reported as an exempt asset on your petition? If it was and cashing it out would mean the trustee gets part of it and that you'd have to pay early withdrawal penalties and income taxes, then I'd just roll them over into another ERISA plan to keep them exempt. I'd try to put off the repairs until the BK is over. I know a cash cushion would be nice. If you have an emergency, you can always withdrawal funds then. But, if you can wait until after you complete your plan and at that time decide you are willing to accept taxes and early withdrawal penalties, at least you won't have to also pay the trustee. Even then, you should try to find other options for funding the repairs.