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401k and bankruptcy?
I believe new bankruptcy law exempts all retirement from being touch during bankruptcy so it should be safe
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Answer Yes, but not until your discharge. If you take money out of a 401K after you file and before discharge, the money is no longer exempt and could be taken b…y the Trustee. If you take it out after your discharge the money is yours.
No. It is protected by law.
Answer These assets should not be effected at all.
NEWS ALERT: YOUR IN BANKRUPTCY...YOU HAVE TROUBLE HANDLING FINANCES, You have more debt than you can handle...COMMON SENSE: BORROWING MORE CANNOT GET YOU OUT OF DEBT. … Don't do it, don't do it, don't do it! Your 401k is exempt from seizure under virtually all circumstances...including bankruptcy. (Example...OJ Simpson, owed a lot to the Browns after they won the wrongful death suit....they could take his Heisman trophy, his cars, his future income from autograph signings, etc, etc....and did and continue to. As a judgement, he can't even escape it through BK. But, they can not touch his multi million dollar 401k/IRA.) If you take a loan against the 401k, the money is no longer protected...it can and will be taken by creditors...given the opportunity....and since your already in serious financial problems now... it's highly possible that can come about. Then your left with a new debt to pay off, that uses up your 401k....and nothing else. Well, something else - you'll have a big new tax bill and debt, because not paying back the loan of the 401k is the same as withdrawing it...so you pay a penalty on the early withdrawal and everything becomes income! (Rule of thumb, depends on State, but when it becomes a withdrawal, which happens many, many ways, you should consider tax and penalty to be @40% of what you took out). Don't do it, Don't do it, Don't do it! Now...as maybe a more direct answer: There probably isn't a law against your borrowing from the plan. However, depending on your BK, especially in a C13 though, you agreed to only make financial changes with the approval of the trustee. Failing to do so is almost always responded to first by the BK protection being ceased, and sometimes by fraud charges because not keeping your promises to the court falls under that. Finally, the trustee has a right to the funds when taken out and would want them to pay the creditors in the order required by law/the plan.
When you make a contribution to your 401k plan, your employer is required to have that money deposited into your account with the 401k custodian within a few weeks, … From the IRS: "if your plan provides for salary reductions from employees' paychecks for contribution to the plan, then these contributions must be timely deposited. The law states that this must be accomplished as soon as it is reasonably possible to do so, but no later than the 15th business day of the month following the payday. If you can reasonably make the deposits in a shorter time frame, you need to make the deposits at that time." Once that is done, most plans ask you to select some investment choices for your money. Sometimes one of the options is Employer Stock. If you invest in your employer's stock, and the employer goes bankrupt then you could loose the amount you have invested in that stock. Depending on what investment options you have available, stock mutual funds, bond funds, money market accounts, the stock mutual fund may also own some employer stock. So if you are invested in that mutual fund, and also have some emplyer stock in your 401k, your risks are increasing. You are dependent on the employer for current income, you have some employer stock in your 401k account, and the stock mutual fund holds some of the employer stock. Add to that if your employer has a retirement plan for you your risks go up dramatically. Keep employer stock in your 401k at a minimum and you will likely do well.
No...your retirement in a qualified plan (like a 401k), is exempt from seizure up to any amount!
Nothing they are exempt form seizure.
Yes, they must. All debts and ALL assets must be included. No exceptions. Your 401 is classified as an exempt asset by the court. However the loan isn't, and when it is discha…rged by the court, you will lose your 401k against it, and probably have substantial tax consequences. You need an attorney.
Even without the BK this is a very bad move, with it a terrible one. The amount taken is penalized at 10% plus is taxable income...so you lose close to 50% of it. In… BK this is one of the few things tht are exempt...that you can figure on having after the BK. Once you take it out it is no longer protected.
Absolutely...it is always exempt from seizure or use and will NOT be taken.
The MAX amount you can draw is 300k.
No you can't it will be almost impossible to do so don't try to.
Money taken from your 401 into your personal account is considered income/asset. That's why its never a good idea to remove money from your 401 when youre about to file BK.
All ERISA qualified accounts are protected in a BK- meaning creditors cannot seize those accounts.