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What will happen to my 401k when filing bankruptcy?
If a company files for bankruptcy do its employees and former employees lose 401k investments managed by that company?
No, absolutely not. Those funds are actually invested in other things....so, unless you had your 401 invested in the stock of this company (as many Enron people did) - w…hich stock has likely become essesntialy worthless...your invested amounts are secure as an investment in todays world can be.
Answer If the couple apply for any type of joint financing such as a home morgage it could create difficulties. Other than joint financial transactions the …credit of the spouse who was not a party in the BK will not be affected
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.
As with all legal things, they vary a bit by locale and following the correct the process is vital. The intracasies and complexities can be daunting. Engaging a l…awyer, who should explain what is required for your circumstances, is really a good idea. Before you can file for bankruptcy, you must receive credit counseling from an agency approved by the United States Trustee's office. (For a list of approved agencies, go to the Trustee's website at www.usdoj.gov/ust and click "Credit Counseling and Debtor Education.") These agencies are allowed to charge a fee for their services, but they must provide counseling for free or at reduced rates if you cannot afford to pay. In addition, you'll have to pay the filing fee, which is currently $274, and file numerous forms. The most important part of your Chapter 13 paperwork will be a repayment plan. Your repayment plan will describe in detail how (and how much) you will pay each of your debts. There is no official form for the plan, but many courts have designed their own forms. Following are the steps in the Chapter 13 Wage Earner Bankruptcy process: The process begins similarly to a Chapter 7 bankruptcy proceeding, with the filing of a petition by the debtor in the federal Bankruptcy Court. In addition to a list of creditors and a schedule of assets and liabilities and a schedule of current income and current expenditures, the debtor must also file a "Statement of Financial Affairs". This statement must indicate: * Any income of the debtor from employment or operation of business including the amounts and the sources. * Any other income. * A list of all payments made to creditors of consumer debts within 90 days of the commencement of the bankruptcy filing. * A list of all payments made within 1 year of filing to or for benefit of creditors who were insiders (relatives, partners, corporations of which debtor is an officer). * A list of suits to which the debtor is, or was, a party within one year prior to filing. * A list all property attached, garnished, or seized. * A list all property that was repossessed within 1 year before filing. * A list any assignment of property for benefit of creditors within 120 days before filing. * A list of gifts and charitable contributions made within 1 year of filing. * All losses from fire, theft, gambling etc. within 1 year or since the commencement of the action. * Any payments made for debt counseling or bankruptcy (including attorneys). * Any transfers of property made within 2 years before filing. * Any property transferred to a trust within 10 years prior to filing. * All financial accounts that were closed within 1 year. * All safe deposit boxes. * Any setoffs to creditors. * Any property held for another. * All premises occupied within last 3 years. * The names and addresses of spouses and former spouses if the debtor lived in community property state. * Any businesses. It is extremely important that all the forms are completed accurately. Debts that are not listed will not be discharged at the completion of the bankruptcy proceeding. Failing to list assets in an attempt to hide them from creditors may result in serious consequences, including the denial of discharge or charges of bankruptcy fraud. The filing of the bankruptcy petition must be accompanied by a proposed payment plan over three to five years. The proposed payment plan must provide for the payment of all "priority claims" in full unless the particular priority creditor agrees to a different plan or, if the claim is a domestic support obligation, you agree to contribute all of your disposable income to a five year plan. "Priority claims" are those claims that are given a special status under bankruptcy law, such as taxes and the costs of the bankruptcy proceeding. There are limitations on the ability to modify the payments due on home mortgage loans under Chapter 13. The bankruptcy trustee appointed by the Bankruptcy Court must review the proposed plan for accuracy and feasibility. The proposed plan is distributed to creditors who have the right to object to the plan if it is unreasonable. If the plan is approved, the debtor keeps all assets during the period of the plan. The debtor makes monthly payments to the bankruptcy trustee who distributes the funds to the creditors according to the plan. If the plan is completed as approved, the debtor is discharged from unpaid debts. If the proposed plan is not completed as approved, several alternatives are open to the debtor depending upon the reasons for the non-completion of the plan. The bankruptcy trustee may support a modification in the plan if you are unable to complete it, because of circumstances such as serious illness or loss of a job. If the inability to complete the plan is due to circumstances for which you cannot "justly be held accountable," and if your creditors received at least as much as they would have under Chapter 7, and modification is not possible, you can apply for a hardship discharge. The hardship discharge does not apply to debts that were not dischargeable under Chapter 7. See 11 USC 1328(b). If the debtor fails to keep up payments on the plan, creditors may apply to the Bankruptcy Court to terminate the Chapter 13 proceeding by dismissing the proceeding entirely. If the proceeding is dismissed in its entirety, collection efforts against the debtor's assets may resume as before.
Absolutely...it is always exempt from seizure or use and will NOT be taken.
Absolutely nothing. The emplyees 401 is held in investments the emplyee determines, manged by an independent group (normally a brokerage house or large bank, like Fideli…ty or Wachovia, etc). The money is entirely independent of the company and has nothing to do with them.
The MAX amount you can draw is 300k.
When you file bankruptcy, you are required to fill out quite a few bankruptcy papers. Among these are Schedule C, which is a form where you list the property you are cla…iming should be exempt (meaning you get to keep it). Both federal and state laws provide exemptions for certain property that a debtor is allowed to claim as exempt. What property is eligible for exemption status varies from state-to-state; however, some states allow you to choose whether to use the federal exemptions or your state's exemptions. If federal exemptions allow you to keep more property than your state's exemptions, then you should opt for federal, provided your state allows it (not all states allow you to choose between federal and state exemptions). The following states DO ALLOW you to use the federal bankruptcy exemptions if you want: Arkansas, Connecticut, Washington, D.C., Hawaii, Massachusetts, Michigan, Minnesota, New Jersey, New Mexico, Pennsylvania, Rhode Island, South Carolina, Texas, Vermont, Washington, and Wisconsin. The following states DO NOT ALLOW you to use the federal bankruptcy exemptions: Alaska, Arizona, California, Colorado, Delaware, Florida, Georgia, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, South Dakota, Tennessee, Utah, Virginia, West Virginia, and Wyoming. If you do not use the federal exemptions (either by choice or requirement), you are also allowed to use the federal non-bankruptcy exemptions. What property is exempt under federal law? Remember that only 15 states and Washington, D.C. allow you to use the federal bankruptcy exemptions (see above). These exemptions can be doubled if you are filing bankruptcy jointly with your spouse -- Personal and Real Property:(1) Household: Up to $425.00 per item not to exceed a total of $8,625.00 (includes animals, appliances, books, crops, furnishings, household goods, clothing, musical instruments)(2) Jewelry: Up to $1,075.00(3) Vehicles: Up to $2,575.00(4) Work tools (implements, books and tools of trade): Up to $1,625.00(5) Health aides (wheelchair, etc.): Unlimited(6) Burial plot: Up to $16,500.00 (in lieu of real estate exemption)(7) Real estate (house, co-op or mobile home): Up to $16,150.00(8) Any property: Up to $8,075.00 of unused portion of real estate exemption Wages, Pensions, Recoveries and Benefits:(1) Wages: None(2) Wrongful death funds: Amount needed for support(3) Personal injury funds: Up to $16,500.00 (excluding that for pain and suffering or pecuniary loss)(4) Lost earnings payments: Unlimited amount(5) Retirement benefits: Amount needed for support(6) Alimony / child support: Amount needed for support(7) Unemployment compensation: Unlimited amount(8) Veterans benefits: Unlimited amount(9) Social security benefits: Unlimited amount(10) Public assistance: Unlimited amount(11) Crime victims compensation: Unlimited amount Insurance:(1) Disability: Unlimited amount(2) Unemployment benefits: Unlimited amount(3) Unmatured life insurance: Unlimited amount(4) Life insurance policy loan value, dividends or interest: Up to $8,625(5) Life insurance proceeds: Amount needed for support What property is exempt under state laws? In general, most states allow you to keep much of your personal property, particularly that which has little or no value. You can even keep collateralized property in certain circumstances (of course, you have to reaffirm the debt). Personal property includes tools that you use to earn a living (although there are limits on this); your clothing; and all of your household goods. As to your income, usually about 75% of your wages, and all of your unemployment and welfare benefits, worker's compensation, pensions, and insurance benefits are exempt. Most states allow you to double the amount of the exemption if you're married, but not all states, so make sure your state allows this before doing any calculations.
A basic, rough primer: BK is always done under FEDERAL Laws, in a Federal Bankrutpcy Court. Basically State makes little difference. (Yes the BK Courts operating in… certain areas have certain special exemptions and such, minor in the overall, generally intended to make things adhere to the local laws and customs better). In a personal bankruptcy, YOU go bankrupt. Not a debt, not a loan...not a car...not a this or that. ALL of your assets, of all types, MUST be disclosed and reported in BK, and ALL of your liabilities/debts must be too. No exceptions, no picking and choosing. They are all, always involved in some way. The court will then order each of them in priorities according to the laws. Some things may be exempt from use or discharge (like your personal furntiure and retirement accounts are exempt and child support cannot be discharged) - and the rest may be used. With one to pay the other. (All possible creditors are contacted and asked to say what they are owed....you may be required to even take advertisments out to make sure everyone is notified). Any deal you've done for several years is open to scruitiny and review. The court can reverse them, take them out of the BK, or even have them prosecuted as trying to defraud your creditors. (So, no you can't sell your boat to your brother and then declare BK). Debts secured by an asset (say a car) have first call or right to the money received from that asset. If it isn't enough to pay the debt, the remainder of that sdebt becomes a general or unsecured claim against the BK., and has a chance to payment on that level too (albeit a lower priority than those who have yet to receive anything). The end/remaining amount that can't be satisfied is generally discharged by the court...meaning you no longer owe it. You get a fresh basically debt free start....many of those you owe don't get paid what they had expected and relied on, if anything. There are many other considerations too. BK will severly hurt your ability to get credit for a very long time for example. It is on your credit report for at least 10 years...and employers refer to that too, as do landlords and more. Many do not rust people with bankruptcies in their past, especially in the last few years. Many more things. Not disclosing all items is frequently trie and easily discovered, in which case - as you are swearing under oath to the court you included all info - your case is dismissed, and regularly, fraud charges are pursued. (Courts don't take to being lied to well). Many seem to fall into the trap thinking that they can trick or change the system. It simply ain't going to happen. The courts, Judges, laws, bankers, all those zillions of attornies, etc, have been through this thousands of times for many, many years. The processes are fairly well worked through and prepared for tricks and games. It is unlikely you would discover one that hasn't been tried a zillion times before! The Cos that claim they can change your record, or make magic happen (either before or after BK), are scams, and getting caught doing something unsavory (intentional or not), other than screwing up your bankruptcy filing, is frequently considered and persued criminally. (Think your financial troubles are bad, try adding in criminal ones). The legal process and system is demanding even for those experienced with it. Many of your creditors will have an attorney to assure they get as much as possible, even groups of lawyers, who specialize only in bankruptcy. Simply you should/better/need to have one too
Many possibilities...C-11 themseleves have many outcomes. Basically your funds are safe. The funds generally are with a separate administrator (bank/financial institution), an…d then invested per your instructions. If you have funds invested in your Cos stock or such....that will likely become worthless like investing in any failing Co. The plan itself, at least the employer matching part, will probably be stopped - as the Co looks to save costs. If the Co does fail, you will be able to convert the vested portion of your unds into an IRA, probably with the same institution... and it will seem the same to you.
In a Condo...there is no separate building to file for BK. The individual Condo owners pwn fee simple title, (that is complete title) to their unit. That could happen in a C…o-op...where the building is owned essentially by a Corporation and the Co-op owners own shares in it. Another Legal Perspective Although you haven't provided much detail, if there is a bankruptcy then there must be outstanding debt. Condominium ownership is a complex issue, especially in cases of bankruptcy or foreclosure affecting the developer when the construction has not been completed, there are unsold units and there are outstanding blanket mortgages and other debts that affect the condominium parcel and the common areas. Condominium projects have been victims of the depressed real estate market and many developers were funded for projects that were not well planned or stable from their inception. A unit that has been sold is the property of the buyer. However, if the condominium project remains unfinished with outstanding debts, it is also likely that a viable condominium association was not established and the business of the condominium is not being monitored (condo fees, utility bills, insurance, maintenance, etc.). That type of situation leaves the unit owner in a position of owning a property with a decreasing value and without the customary benefits of condo ownership. Many condominium projects "go under" and unit owners are left with an unsellable unit in an unfinished condominium. Sometimes another developer will purchase the developer's interest and complete the project.
Can employee stock options be converted to a 401K without bad faith before filing a Chapter 7 Bankruptcy?
Answer . \ngenerally no. the only type of money that can be put into a 401k are payroll deductions, roll ins from other 401k's, traditional or Rollover IRA's and pensions….\nIf the stock options are in one of these plans, call your plans service center to get your plans rules and procedures. It is rare for stock options to be in one of these plans. Also stock options have no real value until you exercise them (buy the stock).
Answer Short answer, they are responsible for the debt. So, if my name was added to the auto loan only bc I was married to my ex, not to benefit by using my credit… score, am I still liable? This car was repo'ed in 2003, sold for half of what was owed. In our divorce, my ex was awarded the car and to hold me free of harm from any financial obligation to that vehicle. Now, he filed for bankruptcy. Is this going to come back at me? Thanks Erin
Answer You will generally be notified and have to timely submit documents - a proof of claim - to support how much you are owed. Then depending on a number …of factors, what the debt is for, if it is secured, howm much assets the debtor has, etc., and how big a creditor you are...your participation in a plan to eliminate or restructure the debt with the other creditors, as part of the court process, will be available. The court will ultimately determine an acceptable plan, (albeit hopefully with the approval of creditors), and the assets of the debtor are used to pay off the debts...normally, with each creditor getting less than the were fully entitiled to.
Direct deposit of any monies while filing for Chapter 7 bankruptcy are safe. However, under Chapter 13 bankruptcy, an automatic payment may be required to the trustee from… a direct deposit of wages and other sources of income.
If they were ordered by the court (i.e.: child support - back taxes - etc) you must still honor them, bankruptcy will not do away with court ordered liens. . Liens placed by p…rivate persons or businesses will have to take their place in your long line of creditors. As soon as you file, you take the papers from the bankruptcy court showing that you filed to your employer and the garnishment will stop. There are some exceptions to this.
I assume you mean after YOU filed bankruptcy (the creditor's filing bankruptcy doesn't affect your garnishment, except maybe to change who's "garnisheeing"--NOT "garnishing"--…your wages). If so, contact your attorney so he/she can bring the creditor into court for violating the automatic stay.