401K Withdrawl During Ch13

[SJF75]

I keep getting conflicting information on this. Is it ok to take a hardship withdrawal for dental work while you are actively in a CH13 repayment plan? This would not be a loan, thus not incurring any extra debt and it's my money, so I don't see why I would not be allowed. However, you do have to file taxes on that money so the trustee would definitely know you took the money at the end of the year. I have a very strict trustee so I definitely don't want to do anything to mess up our plan. But because she is so strict, our attorney doesn't even like to ask permission for many things. I will reach out to him but I am just wondering if anyone else has done with or has experience with it.

BTW - No we are not in a 100% plan. We are at about 35% payback to unsecured.

[justbroke]

If you need to take money from your 401K for pay for needed dental work, just speak with your attorney. They allow these emergency withdrawals all the time without incident. Please be aware that you may need to pay a 10% penalty for the withdrawal and you will be taxed on that withdrawal at your current marginal rate.

[SJF75]

I forgot to mention that we get money from the VA that is not included in our Ch13 payment and my lawyer always says that the trustee is not going to approve anything extra for us because she knows we have that extra income. I understand having to give up any bonus or tax return but it frustrates me that I have to ask to use what is essentially my money.

Any suggestions on how to convince my lawyer to help me request this? Yes we do get extra money from the VA and if I am being honest...we have still not been able to save a whole lot. I am afraid to drain our entire savings for these things.

[justbroke]

Simply, you just ask. If it's for medical care that is not elective, then just simply ask. Worse is that they say no and you have to use your savings. I don't see a "no" if this is for necessary dental (medical) care at all. The underlying issue is that once you take that withdrawal from the 401(k) you now have converted it from protected by law to "disposable" income. The only question is whether this is medically necessary and I don't see any attorney or even Trustee saying no.

I am a high earner and my Chapter 13 paid less than 2% for the unsecured creditors even with that I kept my tax returns 3 of 5 times due to things that came up. I did not raid my 401(k). Even if I wanted to raid my 401(k) I would have still asked just to make sure.

To me your question doesn't sound like you only need $1K to do a root canal. It sounds like an expensive procedure so the question I presented will be the one that will need to be answered sufficiently for that yes.