QUESTION
Would I be able to take out a 401k loan?
Asked on Mar 24th, 2012 on Bankruptcy - Mississippi
More details to this question:
I'm considering filing for Ch 13 bankruptcy. If I do so and pay the filing fee the same day will the automatic stay take place then or weeks later? Would I be able to take out a 401k loan which I'll be paying back through payroll deduction? Should I take a loan first?
4 ANSWERS
Bankruptcy Attorney serving Livonia, MI
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Charles J. Schneider, P.C.
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In most circumstances take it out first.
Answered on Jul 02nd, 2013 at 12:45 AM
Bankruptcy Attorney serving Hampton, VA
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Haven Law Group, P.C.
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The automatic stay goes into effect the moment the bankruptcy is filed. You would probably be better served taking out the loan ahead of filing but you need to discuss that with an attorney.
Answered on Mar 29th, 2012 at 11:16 AM
Bankruptcy Attorney serving Concord, CA
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William Rubendall Attorney at Law
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Filing for bankruptcy creates an automatic stay that is effective immediately. There are several factors insofar as timing of taking a 401k loan. If you intend to take it after filing you need trustee permission. If you take it before filing it might affect your payment. For instance, the trustee may consider the loan to be the same as a personal loan and not allow it in the bankruptcy.
Answered on Mar 27th, 2012 at 12:45 PM
Chapter 7 Bankruptcy Attorney serving Clinton, MS
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Timothy Kevin Byrne Attorney at Law
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If you must raid your 401k , I would do so prior to filing. However, I would urge you to leave the 401k alone until you talk with counsel. Once you file your 401k becomes a loan payment under chapter 13. You need to discuss all of this with counsel. All your actions will pact your chapter13.
Answered on Mar 27th, 2012 at 11:16 AM