What happens if you take a loan from your 401k during chapter 13 without permission?

Answer 1

What if you do not do as legally directed by any court or judge? And in this case, as YOU went to them and asked for their protection under BK laws, and they are working to resolve your failure to perform on agreements and pay...your going to have a pissed off Judge/administrator too. The keast they would do is drop/dismiss your case. So all the creditors come and get everything they can, and some would say deserve. BUT - a very real thing here....the doing of what your suggesting is about the stupidest thing financially anyone can do. Your 401 is protected from seizure, for use in BK or otherwise. The money taken out will not be...it will be taken and used to pay the debts you have, by the creditors. That will leave you without the asset, and as the BK can't discharge the secured loan you made AFTER the BK filing, you will still have the debt to pay back to the plan. Consider, really, your apparent success (or lack thereof) in handling financial things, and apparent inability to understand what the effect of what our doing is, really indicates you shouldn't consider trying to outsmart the system. That is almost laughable. Make sure you take the legally required financial training courses for anyone in C-13.....you need them as a start.