If I wait until January to withdraw 401k

[Dealer36]

I'm not meaning to repeat the same question over and over but I really need some help on this...I am not 100% sure that I'm even going to take my 401k out...depends on how fast I get work...but my main concern is that if I wait until January will it be to my benefit since when I filed chapter 13 the plan was filed on me making 52,000. I have made 53,000 this year counting the paid time off my employer will pay me for. Basically, in income I made about the same as last year. Will my creditors view this differently if I take it out this year which would put me at around 66,000 for the year rather than if I take it out in January and then count the total of my income for 2009. Do they want it just because you withdrew it or are there still "income" factors
because (just speculation) if I decide to stay out of the casino business I believe I will make less in 2009 therefore the creditors being LESS likely to go after it...Am I wrong in this theory? I do know the tax consequences on this already. Any help would be greatly appreciated.

[southerncomfort]

I am not 100% certain, but in my mind the 401K withdrawel would be seen as additional income you would be technically required to report. In my district, retirement funds are off limits in determining assets and my trustee had no interest in even knowing about my or my husband's retirment plans. But, I think that is due to a social policy of preserving retirement funds--FOR RETIREMENT. So if you withdraw early, it could be viewed as "income" (I think th IRS views it as income).

Now whether or not you make less $$ this year and the withdrawel of the 401K would only add up to make your income the same as last year--that's speculative. I personally would not withdraw the 401K funds and I am not a super-strict rule follower (as some here are). Why risk losing something that you have protected by the BR court?

[PoorGrammyinBK7]

What if you were to take out a loan against the 401K, instead of cashing it in?