Re: We took cash from 401K

Filing Bankruptcy Chapter 7 and Chapter 13 Personal Bankruptcy

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Posted by: santa claus on 07/29/03:

In Reply to: We took cash from 401K posted by: Gene on July 29, 2003 at 18:12:07:

It was a mistake to cash out your 401k before filing Ch.7. If you had left it in the 401k account, it would be all EXEMPT (almost all states) and all yours to keep after ch.7. But, now that you have taken it out, it is NO longer exempt (unless you have some other exemptions available.)
You can still put it back into the 401k or another IRA (ie. rollover) within 60 days of withdrawal. If you can't do a rollover and have have no other available exemptions to protect it, then you should spend on on necessities (eg. food, clothes) or other needed exemptable property (check your state list) before filing Ch.7. There is no reason to spend it on your house or mortgage since you intend to walk away from it (ie. you owe more than it's worth.)

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Subject  : Re: Re: We took cash from 401K

Comments:
: It was a mistake to cash out your 401k before filing Ch.7.  If you had left it in the 401k account, it would be all EXEMPT (almost all states) and all yours to keep after ch.7.  But, now that you have taken it out, it is NO longer exempt (unless you have some other exemptions available.)

: You can still put it back into the 401k or another IRA (ie. rollover) within 60 days of withdrawal.  If you can't do a rollover and have have no other available exemptions to protect it, then you should spend on on necessities (eg. food, clothes) or other needed exemptable property (check your state list) before filing Ch.7.  There is no reason to spend it on your house or mortgage since you intend to walk away from it (ie. you owe more than it's worth.)




 
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