BK13 Money Question

[cologuy77]

Once you file for a BK13, what is the average percentage of your income, that your Trustee lets you keep each month?

Can you still contribute to your 401k?

Can you save aside money for household emergencies, like a hot water heater going out, etc?

Food, Clothes, Entertainment?

Just Curious.

[NowImDownInIt]

I think generally, you are not supposed to contribute to a 401k plan.

Saving is difficult, but if you can find some wiggle room in your VERY tight budget, it's possible. There is not an average percentage of your income you are allowed to keep. Everything above and beyond the neccesities cited in your budget is supposed to go to your plan.

Food, clothing and entertainment (in various limited amounts) are allowed as a part of your budget, but as I said, limited.

[Flamingo]

These questions are asked numerous times on here - do a search on this forum and you will find tons of information that you need and which will be of help to you.

[kmb]

We're allowed to contribute to our 401k's, and get the employer match. We weren't contributing much above that before anyway due to our debt, so as long as you don't go from contributing 6% to 15%, you should be fine.

[IDKwhat2do]

KMB, what state/district are you in?

My attorney says 401K contributions are not allowed, but I see where they are in many cases (ch 13). 2005 "reform" included a section that states amounts withheld for 401K are not to be included in disposable income, in other words, contributions are permitted.

[Flamingo]

KMB, what state/district are you in?

My attorney says 401K contributions are not allowed, but I see where they are in many cases (ch 13). 2005 "reform" included a section that states amounts withheld for 401K are not to be included in disposable income, in other words, contributions are permitted.

Amounts withheld may mean just funds withheld from a paycheck for 401K loan payments. Does that section specifically state contributions for savings or funds paid in for loan payments? 401K contributions for savings are voluntary and therefore could create issues if they are large in that it would reduce one's disposable income to repay creditors...

[woeisme]

Not all 401K funds are voluntary. I'm required by my employer to put in 5% of my salary into my retirement fund, is part of my employment contract. I just had to include a copy of the rules of my company for the trustee. So that might be why some contributions are allowed and others not.

[Flamingo]

Not all 401K funds are voluntary. I'm required by my employer to put in 5% of my salary into my retirement fund, is part of my employment contract. I just had to include a copy of the rules of my company for the trustee. So that might be why some contributions are allowed and others not.

Is this an actual 401(k) plan or another pension plan/option by your company for those that actually have employment contracts (i.e., executives, higher-ups, etc.). Retirement plans are voluntary (i.e., 401ks) but if there is something separate by the company you work for as to requirements to contribute that is something different and if you have the backup you should be, and are, fine. The majority of people are not required to contribute to any sort of savings, health or retirement plan offered by their employer.

[oldrocker]

http://www.************************/...13-bankruptcy/

[IDKwhat2do]

bapcpa

New law added section 541(7)(b). The judge in my district has ruled that this, as well as 1322 (regarding loan repayments) protect both of those withholdings from the debtor's disposable income. In other words, are not counted as available to repay unsecured creditors. If you have Pacer, check out Middle District of Florida, case "Garrett". I don't have the case number handy now.
My attorney and I are meeting Friday. The old law did NOT allow 401K loan repayment OR contribution. New law, specifically, does.

Link Old Rocker posted above references the case. It is on Pacer, Debtor name Garrett. 3:07-bk-3008-JAF. Judge Funk's opinion is clear.
Makes me kinda wonder why this same Trustee gave me the hardball interview as to why I couldn't stop paying my 401K loan to pay my unsecured creditors more $. I explained that they are mandatory deductions from my pay. The only way to stop them is to lose the job. Not a great solution to the situation.