withdrawing money from 401 after bk

[evelyn]

If I withdraw money from my 401k to help me get a new start one week or sometimes after filing for bk will that be taken away from me.

[hhou812hh]

If you take out large amounts right after your discharge that may be a problem. If it's just enough for living you should be ok. It wouldn't look good days or weeks after your discharge to all of a sudden have several grand in the bank. Depending upon your age you will pay high penalties to the IRS.

[Lightning]

Don't take money out of your 401k for anything except retirement income. Whatever you take out, you'll lose half of to penalties and taxes. It's an incredibly stupid financial move.

You just got done with bankruptcy. Make your new start a smart one.

[HHM]

It won't be a problem for your BK. But lightning is right, the 401K is for retirement. You filed BK for a reason.

You need to start living within you means now. Taking money of your 401K is not a wise financial move.

[hhou812hh]

If you take out large amounts right after your discharge that may be a problem. If it's just enough for living you should be ok. It wouldn't look good days or weeks after your discharge to all of a sudden have several grand in the bank. Depending upon your age you will pay high penalties to the IRS.

I based my earlier reply on you being in retirement. If not then HHM & Lightning couldn't have said it any better.

[evelyn]

I have not filed bk yet. I am planning on seeing a lawyer this Wednesday. I have all the paper together, just have to list my assests. I don't have a job an I don't have any money. I need some money to get me to FLorida an go live with my sister and her family. I know about the penalities but my husband will not give me a cent. I am in a difficult situation. I don't have to have money going to live w/family but I feel I should put something towards food until I can get on my feet. I don't need a big amount. Not more than $2000.

[hhou812hh]

I have not filed bk yet. I am planning on seeing a lawyer this Wednesday. I have all the paper together, just have to list my assests. I don't have a job an I don't have any money. I need some money to get me to FLorida an go live with my sister and her family. I know about the penalities but my husband will not give me a cent. I am in a difficult situation. I don't have to have money going to live w/family but I feel I should put something towards food until I can get on my feet. I don't need a big amount. Not more than $2000.

Sounds like you're in a desparate situation. If you withdraw any money at least budget for the 10% IRS penalty plus the added income that you will be taxed on.

GOOD LUCK!!

[Lightning]

To get $2,000 in your pocket, you'll have to withdraw at least $3,100 - $3,700. You will lose that much in taxes and penalties. You're doing yourself a great disservice by doing this. Get a job. Any job. Minimum wage will give you enough to help pay for food. Don't sacrifice your future financial here.

[rukiddingme]

I agree

Dont uses your 401K...thats insane. Keep thinking...find a way but leave your 401k alone.

[evelyn]

Thank u for this email. I can hear u when u say think of another way. I did have a job for 18yrs with a company but lost it last WED. I've laid down a little and came back to the board a little calmer about this whole thing. Filing BK is so stressful for me I don't know how anyone makes it, the guilt and all. I think u guys are right. I don't want to pay taxes either. Time to call my brothers and sisters to get me back to my state of birth. I will get another job and maybe take some online classes or something when I get there.