So I owe someone about 10K by the end of March. I haven't looked into any other avenues about getting the money but my plan was request 3 separate checks from my 401k, co sign them and give them to that person so they can pay off their loaned credit. Other wise the accrued interest of $5k will be tacked on. I would like to claim my Chapter 7 ASAP but don't know how to handle this situation and don't know if this is something that could get me in trouble. I asked a lawyer about it and he said he didn't want to know about it. Which basically was poor advice in my opinion. Unless there is some underlying meaning to that. If anyone has any advice or opinions please let me know thanks!
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FIND ANOTHER LAWYER FAST.Originally posted by punisher4711 View Post
When you say your are requesting checks from the 401k are you talking about taking a loan against the 401k?
Is this "person" related to you in any way? If so, you will need to wait one full year plus 1 day after paying to file bk. If this person is not related to you in any way, you will need to wait 91 days before filing. Payment to this person is a preference that can and will be recovered by the Trustee if you do not wait long enough. And, of course, that assumes you can prove you owed that person money and were not simply "gifting" money, which, if it is a gift you will need to wait at least two years to file.
The money sitting in your 401k is exempt. Funds withdrawn lose that exemption. Friend or not, why would you use exempt $$ to pay a creditor?
I recommend that you seek out competent legal advice before you do anything!
Des. -
The money is owed to my mother and she loaned me some of her Home Depot credit that she now owes by the end of March. Is there anyway I can do this maybe borrow some money from someone else and pay them back after my bankruptcy is over?Originally posted by despritfreya View PostComment
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You can borrow money and voluntarily pay any creditor AFTER the bk is over.Originally posted by punisher4711 View Post
Des.Comment
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But, don't pay your mother BEFORE you file BK or the trustee will require that she pay that money to the trustee.
I agree with Des. Get another attorney. If you had gone forward with your plan and simply not told your lawyer, your trustee very well may have discovered the payment to your mother and your entire BK case may have been dismissed without discharge and all of your current debts declared dischargeable forever.LadyInTheRed is in the black!
Filed Chap 13 April 2010. Discharged May 2015.
$143,000 in debt discharged for $36,500, including attorneys fees. Money well spent!Comment
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If you pay this money to your mother before filing BK, that is an Insider Preferential payment, and the trustee will go after your mother for it. You don't want to have that happen, if you want to keep peace in the family. Once you are discharged, then you are free to repay any creditor you wish. Just make sure she understands this. Or is your impending filing something you haven't shared with the family?
Furthermore, keep your mitts off your 401K. That is part of your Retirement, and is exempt. Don't do like many of us did and tap that money before you retire. You will likely end up with income tax penalties, and most likely won't be able to repay it. Once that money is gone, its is GONE! And your Retirement years may be bleaker than you would like.
Good wishes to you!~~~
Last edited by AngelinaCat; 03-03-2015, 10:48 AM."To go bravely forward is to invite a miracle."
"Worry is the darkroom where negatives are formed."Comment
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