QUESTION
If I cash out my 401k, can the court take it since we have filed bankruptcy this year?
Asked on Nov 06th, 2012 on Bankruptcy - South Carolina
More details to this question:
Now, my employer is closing our company. My husband is also laid off and we need this money to pay bills.
8 ANSWERS
Call your attorney and ask him what the cut-off date is in your case. "Found money" (like an inheritance, a tax refund, or cash you take from your 401K) can be taken (I didn't say would be) prior to that date.
Answered on Nov 09th, 2012 at 6:09 AM
If you have spent the money after withdrawing it, the bankruptcy court can't take it. But it can be considered as income for the purpose of calculating your income during the previous 6 months on the Means Test. As long as it stays where it is, it is completely protected as long as you disclose it & claim the exemption.
Answered on Nov 08th, 2012 at 3:40 AM
Bankruptcy Law Attorney serving Livingston, NJ
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Law Office of Stuart M. Nachbar, P.C.
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A. Depends if you filed a 7 or a 13 B. Also depends on what exemption was used to protect it.
Answered on Nov 08th, 2012 at 3:36 AM
Bankruptcy Law Business Attorney serving Asheville, NC
Partner at
Pitts, Hay & Hugenschmidt, PA
2 Awards
Did you file Chapter 7 or 13? If Chapter 7, you are free to do anything after the case is filed. If Chapter 13, you will need permission from the Court.
Answered on Nov 08th, 2012 at 3:31 AM
If you have already filed bankruptcy and the money was in the 401(k) at the time of the filing, then after waiting for your discharge, you may do as you wish with the money. It belongs to you. It may make more sense to wait until January to withdraw the money, so the taxes will be paid in 2013 rather than this year. Regardless, try hard to avoid the withdrawal if you possibly can. There are other jobs out there. If you must withdraw money, you do not need to withdraw it all at once.
Answered on Nov 08th, 2012 at 3:19 AM
Bankruptcy Attorney serving Phoenix, AZ
at
Law Office of D. L. Drain, P.A.
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It depends on the type of bankruptcy.
Answered on Nov 08th, 2012 at 3:18 AM
Criminal Defense Attorney serving Deltona, FL
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R. Jason de Groot, P.A.
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More facts are needed to advise appropriately.
Answered on Nov 08th, 2012 at 3:12 AM
Bankruptcy Attorney serving Myrtle Beach, SC
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Law Office of Margaret L. Evans, PC
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Question: If I cash out my 401k, can the court take it since we have filed bankruptcy this year? *- Yes, because it will be converted to a non-exempt asset*
Answered on Nov 08th, 2012 at 3:09 AM