Need opinions/advice regarding 401k early withdrawal with no penalty...

[justbroke]

So wouldn't her 401k, be considered property from a divorce?

That's exactly what I want to know; I'm guessing that it is. But, seeing I'm more than 180 days post filing I'm not sure that it matters.

11 USC 541 (Property of the Estate) specifically says in section 5, that "any interest in property... on the date of the filing of the petition, and that the debtor acquires or becomes entitled to acquire within 180 days after such date".

It is 180 days of the filing date. Trustees say dumb things sometimes, and that is specifically why I'm going to say that people with property, really need to be filing with an attorney. Do as I say... not as I do! LOL

In this case, Cupcake, I may have made a mistake. The BK code reads " becomes entitled to acquire" within 180 days. This could mean that if you were entitled to it within that 180 days,

Now, this was probably hashed out with the Trustee anyhow because you knew that you were in divorce proceedings when you filed. The Trustee should have inquired into any disposition of property. I think if you didn't become entitled to it within that 180 days, it may be property of the estate.

[cupcake]

11 USC 541 (Property of the Estate) specifically says in section 5, that "any interest in property... on the date of the filing of the petition, and that the debtor acquires or becomes entitled to acquire within 180 days after such date".

It is 180 days of the filing date. Trustees say dumb things sometimes, and that is specifically why I'm going to say that people with property, really need to be filing with an attorney. Do as I say... not as I do! LOL

In this case, Cupcake, I may have made a mistake. The BK code reads " becomes entitled to acquire" within 180 days. This could mean that if you were entitled to it within that 180 days,

Now, this was probably hashed out with the Trustee anyhow because you knew that you were in divorce proceedings when you filed. The Trustee should have inquired into any disposition of property. I think if you didn't become entitled to it within that 180 days, it may be property of the estate.

I actually became "entitled to acquire" the property prior to filing. My divorce was final in December, 2008 and I filed for CH7 in February, 2009. Technically speaking, I've been entitled to it since December, 2008 but my turd of a divorce attorney is finally *just* getting around to getting the QDRO done. And, as I mentioned, the trustee was fully aware of my entitlement to that portion of my ex's 401k. During my 341 he never asked me anything about it or if I intended to cash it out or roll it over.

[justbroke]

I actually became "entitled to acquire" the property prior to filing. My divorce was final in December, 2008 and I filed for CH7 in February, 2009. Technically speaking, I've been entitled to it since December, 2008 but my turd of a divorce attorney is finally *just* getting around to getting the QDRO done. And, as I mentioned, the trustee was fully aware of my entitlement to that portion of my ex's 401k. During my 341 he never asked me anything about it or if I intended to cash it out or roll it over.

Very interesting, so you were a "no asset" case. I would say, that if the Trustee knew... you disclosed it on your forms... and the Trustee didn't want it... then you personally are okay.

I was just trying to do my due diligence and make sure the distinction is known. I didn't know that you were entitled to it prior to filing. The Trustee would have been alerted (which you did), and did not want it.

[cupcake]

Very interesting, so you were a "no asset" case. I would say, that if the Trustee knew... you disclosed it on your forms... and the Trustee didn't want it... then you personally are okay.

I was just trying to do my due diligence and make sure the distinction is known. I didn't know that you were entitled to it prior to filing. The Trustee would have been alerted (which you did), and did not want it.

Correct; I was a "no asset" case. I don't recall what was disclosed on the paperwork as it relates to the 401(k) transfer I'd be receiving from the ex (possibly nothing seeing it would have been considered exempt 401k funds), but he was given the divorce judgment that clearly spelled out what I would be receiving. I know for sure that he reviewed it because the 401(k) transfer was somewhat complex, as there was a personal injury settlement that also played into how much I would receive from the 401k. The trustee discussed the judgment with me and my attorney during my 341.

Truthfully, it surprises me that my trustee let this go, didn't go after it and closed my case. Unless, he's keeping a watchful eye and waiting - is that possible? I was discharged in mid-July 2009 and my case was closed shortly afterwards. The reason I'm surprised is because my trustee is well known for being very difficult and for going after every possible penny. The trustee actually converted my ex's CH7 to an asset case because he wants the tax refund my ex will get next year because of some hefty tax credits he'll be getting.

[sigferl]

Thanks for your post CC. I agree that you must have an emergency fund(9-12 months salary), you can rebuild retirement account later.

Freedom is not free.

I need an emergency fund. I'm single, I live in an apartment, I don't have family to rely on in the case of a job loss or other hardship and I have no credit to fall back on (not that I want or need that anyway). It's ALL me and I need an emergency fund/cushion. And, if I lose my job, I would be unable to borrow from my 401k, leaving me to take an early withdrawal with the penalty.

[cupcake]

Update:

I spoke with one of my attorneys this morning and she confirmed that I can take any/all of the 401k in cash and I should not have an issue with the trustee. As justbroke said, it was fully disclosed in the divorce judgment and in my filing so there's no problem.

Thanks, everyone, for your input!

[NoMoreCards]

Good Deal!!
It is always better to be sure, IMHO

[justbroke]

Very nice!