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If you have a 401K loan when can you pay it off after Chapter 7 so the trustee does not take the savings?
Wiki User
∙ 8y ago
I am a 401(k) specialist with a very LARGE investment company. 401(k) plans are protected under IRS federal law and can NEVER be used against your will to pay off debt due to bankruptcy, foreclosure, tax liens, collection agencies, lawyer attempts to recover money, etc. Your plan may offer something called a Safe Harbor hardship withdrawal to pay for these debts, but you must ask for this. No one else can. You can pay your loan off at any time without fear the money will be taken to pay your debt. Your plan may also allow you or require you to stop paying on the loan as well. Call your customer service center for your plans rules and restrictions.
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∙ 8y ago
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Can you get a small personal loan from a bank or finance company while you are in a Chapter 13?
you have to get it approved through the trustee
What to Know Before Borrowing from Your 401K?
Your 401K is a little bit of a reassuring safety net that you'll be fine once retirement time comes, but sometimes, life can throw unexpected curve balls that may leave you feeling the need to start digging a little into your savings. Even though taking a little bit of your 401K out for present use may seem attractive at the time, there are a few things to consider before doing so.To begin with, taking out a 401K loan is practical if the situation calls for it. However, it's helpful to know that you can't contribute anymore to your 401K savings until you've completely paid off the amount that you borrowed. In most cases, you must begin repaying the loan as soon as your next pay period. For some, this can be the deciding factor in whether or not the 401K loan is even taken out. If you are slow about paying the loan off, you could be in hot water down the line when it's time to retire.Another thing to think about is the fact that a 401K loan is just like a home loan or car loan. Many people make the mistake of comparing the act of borrowing money from their 401K to heading down to the bank and siphoning some money out of their savings accounts. However, a 401K loan must be paid back just as a regular loan should.One of the more interesting things to think about before borrowing from a 401K is that the interest you'll pay on the loan will actually be paid to yourself instead of a bank or lender. Because it is essentially your money you're borrowing, the interest cannot go anywhere else except back to you. In a way, this helps you make a bit of a profit off of your loan even though you're still borrowing. If you can pay the loan off in a decent amount of time and quickly begin contributing again, it may not be a bad idea to borrow from your 401K plan.In general, borrowing from a 401K plan can neither be considered right or wrong. It strongly depends on your situation and how/when you plan to handle the repayments of the loan. The best case scenario, however, is to rule out any other possible solutions to solve your financial troubles before turning to borrowing from your 401K. This is just to keep things safe so that you don't wind up compromising your future retirement savings.
How do you take a loan out of your 401k?
idkbBzbha
What are some good sources regarding borrowing a loan from my 401k?
Some good sources of information about borrowing a loan from 401k include Bankrate and ExpertPlan. Another good online source is the 401k Help Center.
Who collects interest when you take a loan from 401K plan?
You do.
Can the trustee of a chapter 13 case take your 401 k loan?
No...your retirement in a qualified plan (like a 401k), is exempt from seizure up to any amount!
Can you get a small personal loan from a bank or finance company while you are in a Chapter 13?
you have to get it approved through the trustee
Can a title loan be deducted in chapter 13 bankruptcy I have a title loan on my car and am filing chapter 13 - but the trustee is objecting based on re Ransom?
Sure the trustee is objecting. Because you are making payments on your car, Ransom v. America Bank, means the amount of money you would be required to pay would be less than if you did not have a title loan. The trustee wants you to pay off the loan before you declare bankruptcy.Update: I have not been making the payments - I thought the chapter 13 would be making the payments when I send the trustee my monthly payment. I supposed the questions is: is a title loan considered a secured loan.I would check the lending company to make sure they are getting the payment. I would not assume anything. I simply read Ransom. I do not trust trustees. If you walk in and pay the loan with a piece of paper and get a written receipt and send that receipt to the trustee and keep a copy, there can be no doubt. That way your car can not be repossessed and the trustee can not stab you in the back by not paying your loan. Then when your car is repossessed, he can not take the money that you would have used to repay your loan and have you use it to pay your other creditors.
How do you take a loan out of your 401k?
idkbBzbha
What to Know Before Borrowing from Your 401K?
Your 401K is a little bit of a reassuring safety net that you'll be fine once retirement time comes, but sometimes, life can throw unexpected curve balls that may leave you feeling the need to start digging a little into your savings. Even though taking a little bit of your 401K out for present use may seem attractive at the time, there are a few things to consider before doing so.To begin with, taking out a 401K loan is practical if the situation calls for it. However, it's helpful to know that you can't contribute anymore to your 401K savings until you've completely paid off the amount that you borrowed. In most cases, you must begin repaying the loan as soon as your next pay period. For some, this can be the deciding factor in whether or not the 401K loan is even taken out. If you are slow about paying the loan off, you could be in hot water down the line when it's time to retire.Another thing to think about is the fact that a 401K loan is just like a home loan or car loan. Many people make the mistake of comparing the act of borrowing money from their 401K to heading down to the bank and siphoning some money out of their savings accounts. However, a 401K loan must be paid back just as a regular loan should.One of the more interesting things to think about before borrowing from a 401K is that the interest you'll pay on the loan will actually be paid to yourself instead of a bank or lender. Because it is essentially your money you're borrowing, the interest cannot go anywhere else except back to you. In a way, this helps you make a bit of a profit off of your loan even though you're still borrowing. If you can pay the loan off in a decent amount of time and quickly begin contributing again, it may not be a bad idea to borrow from your 401K plan.In general, borrowing from a 401K plan can neither be considered right or wrong. It strongly depends on your situation and how/when you plan to handle the repayments of the loan. The best case scenario, however, is to rule out any other possible solutions to solve your financial troubles before turning to borrowing from your 401K. This is just to keep things safe so that you don't wind up compromising your future retirement savings.
File a chapter 7 but owe the credit unoin can the still take your pension?
No one can take your qualified pension. However if you took a loan against it, and you don't pay back the loan, the pension/401k is lost. Moreover, it is considered a withdrawal (if it is a 401k) and you get hit with early withdrawal penalty and the tax on the income too.
What are some good sources regarding borrowing a loan from my 401k?
Some good sources of information about borrowing a loan from 401k include Bankrate and ExpertPlan. Another good online source is the 401k Help Center.
Can you have a cosigner on a car loan while in the last few months of bankruptcy?
When participating in a Chapter 13 BK repayment all major financial transactions must have the approval of the bankruptcy trustee. If the person does not clear the action with the trustee the "13" can be dismissed with prejudice.
Who specializes in refinancing loans while in chapter 13?
Nobody. You can only get a loan in c. 13 if it is approved by the trustee and the court. You will have to show why it is needed and how it will affect your plan. You may have to amend your plan. You have to present the trustee and the court with the proposed loan documents, which can be from any lender. Needless to say, these will be secured loans for the most part and will often replace an existing secured loan, for a car usually. Nobody. You can only get a loan in c. 13 if it is approved by the trustee and the court. You will have to show why it is needed and how it will affect your plan. You may have to amend your plan. You have to present the trustee and the court with the proposed loan documents, which can be from any lender. Needless to say, these will be secured loans for the most part and will often replace an existing secured loan, for a car usually.
Who collects interest when you take a loan from 401K plan?
You do.
Can you get a car loan with an open chapter 13 bankruptcy?
AnswerPerhaps, but the terms will not be favorable, most especially the rate of interest. It is also a requirement when in a Chapter 13 repayment bankruptcy, that all major financial transactions have the apporval of the bankrutpcy trustee.
What is the penalty for early withdrawal of 401K loan?
The penalty is 10%. All in all you will pay your tax bracket + 10%. Actually that is incorrect. The question was about a 401k loan. There are no taxes on 401k loans unless you default on the loan. If the loan defaults then yes you would owe 10% penalty plus Federal and State taxes at tax time.
