I know it's never okay to take out a loan while in BK but...

We were on average billing with our light company. In December dh's company did a huge layoff. They allowed him to keep working but at very reduced hours. We ended up behind on our light bill and our mortgage. We finally caught up our mortgage this month and were about to tackle the light bill when the light company sent me a disconnect notice. It seems we now owe them $710 by next Friday to keep our lights from being cut off. I only have $400 budgeted and no other means of coming up with the excess.

I had to have an MRI today that I had to pay $800 for.

Would the trustee really know if we took a small loan out of dh's 401K to cover this??

We make too much to qualify for any aid with our light bill. We could pay this back within 2 months but this is the only way we have to borrow it. My parents can't loan it to us and neither can our in laws.

Thanks!

Thanks!

Have you called the electric company? Do you have the $400 in hand to be able to pay them? If so, offer that and explain your situation. How much can you give them next month? I can't tell you how many times I've called the utilities on the last day to make payment asking for some kind of extension. So far <knocking on wood> I've not had any of them not agree to work with me. And, with some of the utilities, I've done it two or three months in a row.

If that doesn't work, do you have anything you can sell? I realize that you're not supposed to sell assets, but what about small items.... a number of small things can add up to a larger thing. What about selling some clothes to consignment shops. Kids clothes bring good money at Children's Orchard or Once Upon a Child. Can you do any odd jobs - babysitting, typing, pizza delivery, temp jobs, donating blood.... the list could go on an on. I do concessions at a number of our arenas and the tips are usually pretty good.

I would not take out any kind of loan - if you can't make the electric payment on what you have now, how are you going to be able to pay it next month and pay back a loan. I've been where you are (still am, actually) and took out a payday loan. I had it budgeted to pay it back in two weeks, but something or other came up and I had to extend it, once, twice, three times. What a waste of hard earned money!! I'm not dogging on the payday loan companies - even though they rape you on interest, they serve a purpose in life.... I walked in there willingly.

Sorry, I'm rambling. I really do think you should call the electric company..... I hope they can help. I'll be thinking good thoughts for you.

Call the electric company; explain your matter and ask for some sort of paymenent arrangements over the next few months - they will not cut you off if you contact them to arrange some sort of payment. It's when you don't contact them is when you get cut off. Also note it takes a while to get a 401(k) loan. You probably would not have the funds in time as it has to be processed through the holder of the 401(k) for the employer and a check cut and sent to you. The best thing to do is just forget you have a 401(k) plan during the course of your Plan

Well, unfortunately I did contact the electric company...twice as a matter of fact and talked to two different people and they say there is nothing they can do. My power will be cut off on Friday if they don't get there money in full.

Dh gets a raise this Friday so that will be enough to pay back the 401K loan.

I still don't know what I should do but I can't have my power cut off.

Well, unfortunately I did contact the electric company...twice as a matter of fact and talked to two different people and they say there is nothing they can do. My power will be cut off on Friday if they don't get there money in full.

Dh gets a raise this Friday so that will be enough to pay back the 401K loan.

I still don't know what I should do but I can't have my power cut off.

Many electric companies have Needy Family or some other sort of collection each year to help people with difficulties in paying their bills or in danger of shut off? Did you inquire if they have such a program you can look into? Are you a member of a local church? Contact your pastor - most churches have emergency funds available to help out in cases of need. Now is not the time to be shy - many people are having difficulties. You may have to do some digging in your area to find out if there are any places that can help you out for a few months with one of their programs. Log into your County or State website and see if there are any programs out there for hardship cases facing utility cutoffs. Do the same with your power company website. You will have to be proactive with this one to get yourself a temporary fix. You will get out of it - believe me.

Do those type of programs base help on your income?? B/c we are far from being low income we just have a lot of debt.

Man, I feel for you --
In our area, they WILL cut you off, and there are no "payment arrangements" they will accept. I've been there -- we did have our power cut before. Ugh.

And a lot of the help for heating bills programs are for the low-income -- you are right there.

Selling stuff is a good suggestion -- I've sold stuff before, in desperate times.

If you can get the loan in enough time, I'd maybe run it past the attorney and then puruse that, too.

Hang in there -- winter heating bills are the worst, but I find I prefer paying the bigger amount in the winter than going on the balanced billing thing and paying more all the time. Maybe that's dumb, I don't know. I myself owe some $400 by the end of the month.

You are in Chapter 13 Bankruptcy. You have run into hardship during your Plan with debt that you have no funds for which to pay it and no relative or friend who can help you. You would not be able to get funds from your 401(k) for several weeks and are facing cutoff of electricity. Call and ask questions. Those programs are based on need - you are in bankruptcy and can offer to make a donation to the program that can help you when you are in better shape. You need to call and inquire and ask questions. None of us know what is available in the area where you live but you have the capability of make some calls or looking information up on line that can help you. If you continue to face these difficulties, you need to consult your attorney to look into having your Plan modified or look into switching to a Chapter 7.

My gas was cut off in November and I finally got it back January 28th. I know how you feel.

My electric company was one of the more civilized services. I would not have survived if it had not been for them.

If you have children, can you go to a state welfare organization and find out if there is a utility assistance program?

I also know that in some states in the winter time they cannot shut electric off if you have small children at home...not sure if any of that applies to you.

As another poster stated, quickest way is if you have any items to sell get them posted at a good price for some quick cash.

Why are you paying out of pocked for an MRI??? Can't they bill you? Do you have insurance?


We were on average billing with our light company. In December dh's company did a huge layoff. They allowed him to keep working but at very reduced hours. We ended up behind on our light bill and our mortgage. We finally caught up our mortgage this month and were about to tackle the light bill when the light company sent me a disconnect notice. It seems we now owe them $710 by next Friday to keep our lights from being cut off. I only have $400 budgeted and no other means of coming up with the excess.

I had to have an MRI today that I had to pay $800 for.

Would the trustee really know if we took a small loan out of dh's 401K to cover this??

We make too much to qualify for any aid with our light bill. We could pay this back within 2 months but this is the only way we have to borrow it. My parents can't loan it to us and neither can our in laws.

Thanks!

Thanks!

With our 401K, if you execute a loan, it only takes a few days to ge the money via direct deposit. Aces, what state are you in?
Google Free Services for low income families, and see what comes up. I found a bunch of things but I dont know what state you are in. Did you look into HEAP?


You are in Chapter 13 Bankruptcy. You have run into hardship during your Plan with debt that you have no funds for which to pay it and no relative or friend who can help you. You would not be able to get funds from your 401(k) for several weeks and are facing cutoff of electricity. Call and ask questions. Those programs are based on need - you are in bankruptcy and can offer to make a donation to the program that can help you when you are in better shape. You need to call and inquire and ask questions. None of us know what is available in the area where you live but you have the capability of make some calls or looking information up on line that can help you. If you continue to face these difficulties, you need to consult your attorney to look into having your Plan modified or look into switching to a Chapter 7.

Why are you paying out of pocked for an MRI??? Can't they bill you? Do you have insurance?


pssssssst....Mike, she already answered your question in another thread: http://www.bkforum.com/showthread.php?p=147896#post147896

Amanda, I would definitely google using "your community" + emergency financial assistance + electricity, also google with "texas" in there as well. There are going to be agencies out there, especially since you have a toddler.

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Eta: here are some links to get you started:

http://www.211.org/ReferWeb/MainForm.aspx (united way)

http://www.ccctx.org/service_emergency.php this is for the Austin area (I have no clue where in texas you are, but Catholic Charities are everywhere--this link is just an example)

St. Vincent De Paul is HUGE on assisting with utilities...try googling St. Vincent De Paul + your community

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Why are you paying out of pocked for an MRI??? Can't they bill you? Do you have insurance?MM, you need to wake up to the reality of healthcare costs today for millions of Americans. In 2005 census data showed that 15.9% of people in the US have no health insurance - http://www.cbpp.org/8-29-06health.htm

Many millions of others may have health insurance, but the out-of-pocket expenses plus deductibles are thousands of dollars a year.

Because of this, most healthcare providers and hospitals these days require pre-payment to provide expensive services like MRIs.

Time to come down out of the health insurance clouds, my friend. It's a cold, hard reality that medical costs alone force a significant number of folks to file bankruptcy.

Why do you think health care costs are such a huge issue in the coming US elections???

Many millions of others may have health insurance, but the out-of-pocket expenses plus deductibles are thousands of dollars a year.



My out of pocket expenses were 1/4th of my yearly income and can be traced as the cause of my BK.

I had health insurance-- I am glad of that. If I had not, the cost would have been about 100% of my yearly income.

I would still be here though in either case.

Wow, I know I'm fortunate. I said that before.
Literally I pay next to nothing for healthcare. I had surgery last year which included MRI's and catscans etc....cost me the $20 co-pay. That's it.
My company pays 90% of my premiums including dental. Our dental plan isn't as good though. I get 2 teeth cleanings a year included but have to pay 20% of my dental costs. Still decent though since if I need a filling, it'll cost me about $25-35 tops!

I'm not in dreamland. I didn't realize how good I had it I guess.

I have an HMO

You selected a CIGNA HealthCare PCP to be your overall care coordinator, and make an appointment regarding pains you are feeling in your lower legs. Your PCP refers you to lab and X-ray facilities for additional tests before referring you to an orthopedic specialist.

Cost Example
PCP office visit/exam fee $85
Your Copayment $20
Lab fee No cost to you
X-rays No cost to you
No deductible applies
You pay $20

We use lifewise $30 office visit $15 for drugs and $2000 deductible on major med per year..... I pretty happy 5 people premium is $700 a month....

Our insurance is good for the fact that it covers Durable Medical Equipment at 100%, ansd since my son just got a new insulin pump $6800, we paid nothing, but our prespcription coverage sucks, 50% of retail up to $100 max, so between insulin and strips that is $200 a month plus I have two other kids. Other son suffers depresseion and just picked up his new prescription and it cost me $75, So that is $275 a month just in prescriptions. YUCK!! We also have $25 office visits, which isn't bad, it is just that darn prescription coverage!! When we started in this 13 we had $15 prescriptions, so these prescriptions are hitting us hard.

The Salvation Army also has temporary help for utilities and even rent sometimes.

what about pawning items since you still own them, I dont know if that would count as a loan, I dont see how trustee would find out or if they would care about small amount 350.00.

I can't get any agency's to help me with this b/c we are not low income. Now I just got another bill from my light company today for a total of $1234.71!! On Friday they said I owed $1030 total. 710 of that was due by March 28 and the rest was due by April 7th. Now they say they are sorry but they told me the wrong thing and I really do owe the whole $1234.71 by April 7th. I only have $400 at most to give them so that leaves me in the hole 834.71. At this point a 401K loan sounds like the only answer I have. Can anyone give me any other advice on this??

What about your tax return? Have you filed yet? I've read a lot of people have to turn theirs over, but we didn't. We will be using ours for things like dr. appointments, etc. In fact it only took 10 days to get ours directly deposited. Have you filed yours and do you have to turn yours over? If not, file ASAP and have it directly deposited. In that case you may even have the entire thing by the 7th. Just a thought.

We already filed. We got back $4000 and the trustee took it ALL.

Oh, ok. Never mind that suggestion. Sorry to hear that. The selling thing is good. What about gold-I've been seeing lots of news reports that people are getting rid of old jewelry because of the price of gold. If you're really desperate, I would look through my old jewelry box. I know pawn shops don't seem to be the best places to get rid of good jewelry, but I know if I was that desperate, I'd look into that. It may be enough to pay your bill. And pawn shops actually give you a time where you can buy back your own jewelry, although I think it's only 30 days.

If a 401k loan is the only answer, have it direct deposited into your account. I asked our attorney if we could take out a 401k loan if we had a emergency, he stated we could without approval becuase it was our money and not really a loan. but of coarse everywhere is different. I'm suprised the electric company let you get that far behind, they probably won"t work with you since you are probably more that a couple of months behind. Our company would have disconected us about $800 ago. Good luck.

We already filed. We got back $4000 and the trustee took it ALL.

Make sure you adjust so this doesn't happen next year.

If a 401k loan is the only answer, have it direct deposited into your account. I asked our attorney if we could take out a 401k loan if we had a emergency, he stated we could without approval becuase it was our money and not really a loan. but of coarse everywhere is different. I'm suprised the electric company let you get that far behind, they probably won"t work with you since you are probably more that a couple of months behind. Our company would have disconected us about $800 ago. Good luck.

I was just thinking the exact thing. If it is 2 mos late...it's cut.
Never had that happen but a friend did...and it was pretty quick.

my natural gas bill[ mind you I have probably been late 2 times in the 17 years]. I was late this month. The bill was due on the 13th paid it on the 20th got a bill that was dated the 19th only 6 days late, stating our gas was going to be shut off on the 27th if the total amont was not paid. I only paid the 120.00 I was late on .I called the gas company because the bill stated they also wanted the 110.00 that should have been due 4-13 also I paid it and you can bet I wont be late again. what jerks

Yep! It's unreal how these billion dollar companies treat people in tough times.
You would think that these companies, realizing how bad it is right now, would come up with a program to help. If you have to prove one way or another you're going through a tough time right now, they should be willing to help. The thing is, utility companies know you need them so it's a monopoly!

We could pay the loan back really easy with no problems..but as usual my attorney is unreachable. Should I just go ahead and do it?? I mean what are the chances the trustee will know??

What would you do??

GAH! I also just got a call from my neurologist. I have a herniated disc and need to start more aggressive meds and physical therapy which equals more money. Yikes!

Thanks for all your opinions! They are much appreciated!

I would do it....

The reason there is an issue as to your 401(k) is that the money was exempt from your filing but is still part of your BK estate. It belongs to your Trustee as part of your financial estate during your Plan from the day you file to the day you are discharged. With your emergency situation, you need to contact your attorney (keep trying, you'll get him). Tell his assistant or paralegal or the office receptionist you are facing a utility cutoff and need permission from the trustee to touch your 401(k) account while you are in Chapter 13. If you do it without consulting your attorney or trustee, you may run into a problem even if you are facing an emergency.

Call your utility company, give them the $400 you have (pay immediately) and tell them you have to get a loan for the rest but it will take a few days but you will have it.

Many of us run into big problems during our Plan years; If they are continual, talk to your attorney about plan modification or converting to Chapter 7. You really do need to do some planning to avoid things like this occurring again cause it is hard without any credit to rely on or family or friends who can come to the rescue.

If you are really bad off, see if your attorney can ask your trustee for you to skip a month on your Plan payments and make up for it at the end. I has been done.

Wow, I know I'm fortunate. I said that before.

I'm not in dreamland. I didn't realize how good I had it I guess.




We are blessed as well when it comes to medical and dental. I don't see how people make it in the real world when it comes to that.

So true Cali.

As far as a 401K loan, I doubt they will have a problem with it since you are paying yourself back, but Flamingo is right. Better to be safe then sorry.

So true Cali.

As far as a 401K loan, I doubt they will have a problem with it since you are paying yourself back, but Flamingo is right. Better to be safe then sorry.

A 401(k) should be a last resort for anything; you are borrowing your own money that you probably saved pretax and paying it back with taxed funds and losing interest on the amount withdrawn. Good Morning America about a month or so ago had an excellent commentary on 401(k) loans and how it is never good to take one out and how you lose money doing so. Even though the funds are exempt from being taken in bankruptcy, they are still a part of the Chapter 13 and if they were not exempt, they are funds that could have been used to pay creditors. So if you start taking out 401(k)I money to pay for things, you can see why the Trustee will have an issue. Also, you are adding a loan payment in addition to your Chapter 13 payment which is another problem. I am not trying to burst anyone's bubble, just stating the truth/facts. While there is a true emergency here, you still need permission to touch that money during the Plan years. Nothing is worth risking having a Chapter 13 dismissed.

When you desperately need the money, the last thing we worry about is money lost. The money gets deducted from your pay anyway, and I never miss that when it happens. This is why I have an auto increase of my 401K percentage of 1 percent every 6 months. I never notice it. If I need the loan, I wouldn't notice the withdrawel either. This is different with everyone though. Because I'm in sales, I can make sure I sell something to cover that payment every month.

They also say 90 percent of all chapter 13 dismissals are due to non-payment.

When you desperately need the money, the last thing we worry about is money lost. The money gets deducted from your pay anyway, and I never miss that when it happens. This is why I have an auto increase of my 401K percentage of 1 percent every 6 months. I never notice it. If I need the loan, I wouldn't notice the withdrawel either. This is different with everyone though. Because I'm in sales, I can make sure I sell something to cover that payment every month.

Your Plan alloiws you to contribute 1% more increases of your salary to your 401(k) every six months? Where did you find your attorney and trustee? Are they aware of that? I had to get permission after being in our Plan two years to restart 1% withdrawals from my salary and was told if it affects paying any of my bills that I have to stop. Not allowed to go any higher than that!

They also say 90 percent of all chapter 13 dismissals are due to non-payment.

You are correct and the problem that the OP is having leads to all that and needs to get corrected/adjusted before they drain the retirement (what would they do if the 401Ik) was not there?) and sell everything to get through their Plan.

Your Plan alloiws you to contribute 1% more increases of your salary to your 401(k) every six months? Where did you find your attorney and trustee? Are they aware of that? I had to get permission after being in our Plan two years to restart 1% withdrawals from my salary and was told if it affects paying any of my bills that I have to stop. Not allowed to go any higher than that!

My paycheck fluctuates as I'm in sales. They don't check my paycheck to see how much I'm sending to the 401K. My attorney even said to go ahead and pay on our student loans with our extra funds outside the plan. He said the trustee doesn't care what we do, as long as the check comes every month to him. We have a very easy going trustee. He doesn't ask for tax forms, bank statements or paystubs. I am already contributing to our 401K substantially. I'm on an auto increase and have been for over a year ( before I filed ). If anything were to happen, I could say I forgot I had it set at auto increase, but I'm really not worried.