QUESTION
How much trouble am I in because of not knowing that I have a 401k account?
Asked on Feb 22nd, 2014 on Bankruptcy - Colorado
More details to this question:
I filed chapter 13 in May of 2009. In July of 2011 I became disabled and had to leave my job. About a month later, I was told that I had a 401k account with that job and they asked me if I wanted to cash it in or roll it over. I didn't even know I had a 401k account. I cashed it in, because I needed the money for medical bills and living expenses as my state disability money had not started coming in yet. I was not trying to defraud anyone by not telling them about the account because I didn't know it existed. I have made every payment on time and I only owe 2 more payments to the court to fulfill my 60 month plan. What should I do??
6 ANSWERS
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You need to speak to your bankruptcy attorney. The failure to disclose could lead to a denial or set aside of your discharge at a future date. Because the 401(k) was either exempt or not part of the bankruptcy estate, disclosure now may be the best option.
Answered on Feb 25th, 2014 at 4:50 PM
You have nothing to worry about. Your 401k was 100% exempt and, no matter how much money was in that account, it would not have affected your Chapter 13 in any way.
Answered on Feb 25th, 2014 at 4:50 PM
William Rhymer
I would suggest you talk to your Chapter 13 attorney and he or she will work it out for you.
Answered on Feb 25th, 2014 at 4:49 PM
Amend your bankruptcy schedules immediately. Your 401 K is an exempt asset, so not having listed this is not really a major problem, but it should be corrected right away now that you know about it.
Answered on Feb 24th, 2014 at 8:15 PM
No problem. Amend your schedules to disclose your 401(k), as of the date of filing. It will not have an impact on your bankruptcy.
Answered on Feb 24th, 2014 at 8:14 PM
You can always amend your schedule of assets to include the 401k, but the bigger problem is that you spent the money from the account instead of rolling it over. That is a taxable event, and it must be disclosed to the Chapter 13 trustee. It probably will hold up your discharge until you pay the entire amount to the trustee. The best person to help you would be the lawyer who filed your Chapter 13 case. You need to analyze how much debt remains from what you started with when you filed 5 years ago, and what your current income and assets look like. It may be possible to voluntarily dismiss your case and file a Chapter 7 to finish discharging the debt, but that would depend on your current financial situation. You can't just hope they won't find out, because that would be considered criminal concealment of assets and you could go to prison for that.
Answered on Feb 24th, 2014 at 8:14 PM