Withdrawl from cash balance pension ??

[brokeguy]

I'm 30 months into a 40 month plan and would like to tap into my 401K or cash balance plan..
The $$$ will help a family member and we need about 9,000.I've got plenty in either account and am willing to pay the taxes and penalty.
What kind of red flags am I sending up?
Is there a magic dollar amount that gets the trustee's notice ?
And how do they find out anyway ?
I always thought that amounts larger than 10,000 got the gov't attention..

[SANRA308]

we were told we would have to get trustee permission even though it is our money, our oldest son will start college 3 months before plan completed, so we asked our lawyer if this would be a possibility.He stated trustee probably wont care but will have to ask. You are probably old law so may be different for you.

[krielly]

Are you in a 100% payback plan?
Might be a factor as to whether or not the trustee would have any objections. I would definitely consult your attorney on this, as there is no way you should risk getting your bk dismissed when you are so close to the end.

K

[aa06a47]

I'm 30 months into a 40 month plan and would like to tap into my 401K or cash balance plan..
The $$$ will help a family member and we need about 9,000.I've got plenty in either account and am willing to pay the taxes and penalty.
What kind of red flags am I sending up?
Is there a magic dollar amount that gets the trustee's notice ?
And how do they find out anyway ?
I always thought that amounts larger than 10,000 got the gov't attention..

Do you have to supply income tax returns? If so, this will show up as income and the trustee may come after it. Also, the money your taking out was "protected" from creditors as long as it stays in the account. If you withdraw it, you may legally owe it to the trustee.

While neither is a good idea, you might look at borrowing from your 401k plan instead of an out and out withdrawal. There are no tax consequences as long as you can make the payment and continue making your chapter 13 payment.

[NewHope]

Originally Posted by brokeguy
I'm 30 months into a 40 month plan and would like to tap into my 401K or cash balance plan..
The $$$ will help a family member and we need about 9,000.I've got plenty in either account and am willing to pay the taxes and penalty.
What kind of red flags am I sending up?
Is there a magic dollar amount that gets the trustee's notice ?
And how do they find out anyway ?
I always thought that amounts larger than 10,000 got the gov't attention..


Do you have to supply income tax returns? If so, this will show up as income and the trustee may come after it. Also, the money your taking out was "protected" from creditors as long as it stays in the account. If you withdraw it, you may legally owe it to the trustee.

While neither is a good idea, you might look at borrowing from your 401k plan instead of an out and out withdrawal. There are no tax consequences as long as you can make the payment and continue making your chapter 13 payment.
__________________
You must also have to pay it back within 12 months as well.....

[brokeguy]

answers to ???

We are in a very generous 5% payback (mortgage was included) and I don't want to mess any thing up-Our trustee asked for our tax return 2 years ago and it's been quiet since.I can't take a loan from 401K since I don't work there anymore.
Laid off after 28 years ,but I was out of work only 3 days,when I got another more promising job.
I realize the benefit of shielding the 401K from creditors, but the $$$ are mine and I know I shouldn't touch them yet.

[aa06a47]

We are in a very generous 5% payback (mortgage was included) and I don't want to mess any thing up-Our trustee asked for our tax return 2 years ago and it's been quiet since.I can't take a loan from 401K since I don't work there anymore.
Laid off after 28 years ,but I was out of work only 3 days,when I got another more promising job.
I realize the benefit of shielding the 401K from creditors, but the $$$ are mine and I know I shouldn't touch them yet.

Technically, the funds in the 401k are part of the bankruptcy "estate" and do not belong to you until the bankruptcy is through. If they are kept in the fund, they are protected.

[Flamingo]

Technically, the funds in the 401k are part of the bankruptcy "estate" and do not belong to you until the bankruptcy is through. If they are kept in the fund, they are protected.

That is correct. If the OP touches those funds without Trustee permission, he risks dismissal of his Chapter 13. A risk that big is not worth it.

[brokeguy]

have decided againest it

Don't want to rock the the boat now--

What or who is an "OP" anyway ???

I guess I not down with the lingo...

[Flamingo]

Don't want to rock the the boat now--

What or who is an "OP" anyway ???

I guess I not down with the lingo...

OP = "Original Poster"