Wimp lawyer, should I let it dismiss?

[IamOld]

Thanks everyone..great discussions. The wife is 53. I just got a notice today that the trustee wants to put off the confirmation for another month (was next week) due to "notice the debtors for a 2004 exam and complete discovery". Whatever that means. She also complains in the letter that her original objection is not resolved and there is 'other issues'. This may go on forever. I've asked my attorney just what our exact payment would be, including the 401k, assuming that payment is assimilated as well. Haven't heard back. He absolutely doesn't want to battle this lady, and has said the judge sides with her on every issue, never with the BK attorneys. If the trustee and my lawyer were reversed, I'd be in great shape! I guess the way I'm reading everyones advise is..trustee has a right to the 401k, and I'm best off to let her do as she wishes.

Good luck to you my friend. This so nutty and against any semblance of public policy to force people to give up their pensions...

[newbie2]

Thanks everyone..great discussions. The wife is 53. I just got a notice today that the trustee wants to put off the confirmation for another month (was next week) due to "notice the debtors for a 2004 exam and complete discovery". Whatever that means. She also complains in the letter that her original objection is not resolved and there is 'other issues'. This may go on forever. I've asked my attorney just what our exact payment would be, including the 401k, assuming that payment is assimilated as well. Haven't heard back. He absolutely doesn't want to battle this lady, and has said the judge sides with her on every issue, never with the BK attorneys. If the trustee and my lawyer were reversed, I'd be in great shape! I guess the way I'm reading everyones advise is..trustee has a right to the 401k, and I'm best off to let her do as she wishes.

The trustee cannot take your existing 401K funds, but he/she can object to continued contributions while a 401K loan is being paid back. I don't know what else is going on, but I hope you can get it cleared up.

[repuman]

Thanks everyone..great discussions. The wife is 53. I just got a notice today that the trustee wants to put off the confirmation for another month (was next week) due to "notice the debtors for a 2004 exam and complete discovery". Whatever that means. She also complains in the letter that her original objection is not resolved and there is 'other issues'. This may go on forever. I've asked my attorney just what our exact payment would be, including the 401k, assuming that payment is assimilated as well. Haven't heard back. He absolutely doesn't want to battle this lady, and has said the judge sides with her on every issue, never with the BK attorneys. If the trustee and my lawyer were reversed, I'd be in great shape! I guess the way I'm reading everyones advise is..trustee has a right to the 401k, and I'm best off to let her do as she wishes.

[IamOld]

Iamold, I wouldn't assume you are screwed.

You may be able to have both the loan payment and contribution. My plan allowed for both. But, I don't contribute anything near 15% like repuman's wife does. My 401k contribution was only 2% of my salary at the time I filed. When you add the loan payments, the total is about 6.6% of my salary. The 401k loan will be paid off a year before my plan is complete, and my plan provides that I will replace the loan payment with an increased contribution. I was fully prepared to have to step up my plan payment for that last year, but that wasn't required.

My employer does not match contributions. But, it is commonly recommended that everybody contribute at least 10% of their salary to retirement savings. When you hit 40, they say you should be contributing 20%. What is actually allowed in each Chap 13 case is going to depend on the debtor's specific circumstances, the negotiations between the debtor's attorney and the trustee and, if no agreement is reached, how the judge views it. If it gets to the judge, I think arguing that it is good public policy to encourage adequate savings for retirement could help, especially if the total loan and contribution is less than 10% of the debtor's salary. But, again, it's going to depend on the judge's view of the world.

Thank you!!!!!! LadyinRed - yes I am over 40 - I started my current FT job (after a layoff) a few months ago, I am putting in about 15% - would have to do 5% to get full match - so if I have to pull back to 5% fine by me -why am I doing this? because when I started here, my 401k balance was like $50 from the previous job...that's it. No savings. None.

[LadyInTheRed]

Actually, if you have an age/retirement issue, you can "fight" on those grounds. But your attorney may not wish to fight with the Trustee. Sometimes it's easier to appease the Trustee with $20/month than to spend $1,000 fighting the Trustee.

Absolutely. Just catching up with the discussion after my post and want to add that I don't think $20 is worth taking the issue to the judge.

[LadyInTheRed]

Iamold, I wouldn't assume you are screwed.

You may be able to have both the loan payment and contribution. My plan allowed for both. But, I don't contribute anything near 15% like repuman's wife does. My 401k contribution was only 2% of my salary at the time I filed. When you add the loan payments, the total is about 6.6% of my salary. The 401k loan will be paid off a year before my plan is complete, and my plan provides that I will replace the loan payment with an increased contribution. I was fully prepared to have to step up my plan payment for that last year, but that wasn't required.

My employer does not match contributions. But, it is commonly recommended that everybody contribute at least 10% of their salary to retirement savings. When you hit 40, they say you should be contributing 20%. What is actually allowed in each Chap 13 case is going to depend on the debtor's specific circumstances, the negotiations between the debtor's attorney and the trustee and, if no agreement is reached, how the judge views it. If it gets to the judge, I think arguing that it is good public policy to encourage adequate savings for retirement could help, especially if the total loan and contribution is less than 10% of the debtor's salary. But, again, it's going to depend on the judge's view of the world.

[IamOld]

Actually, if you have an age/retirement issue, you can "fight" on those grounds. But your attorney may not wish to fight with the Trustee. Sometimes it's easier to appease the Trustee with $20/month than to spend $1,000 fighting the Trustee.

AGREED!!! I have no wish to fight Trustee and certainly NOT over 20/month!!!!!

[justbroke]

Thanks Justbroke! Not in 13 yet - HOPE!!! to file w/in this month. I mean, for heaven's sake, 20 dollars? I'll leave it up to atty to handle as they see fit. But since I have (as of today) a total of $2,500 for my old age in 401k and spouse has about 1200, I'm not exactly sitting here with 100grand in the 401k! :-) 100grand - wish I were :-) :-)

Actually, if you have an age/retirement issue, you can "fight" on those grounds. But your attorney may not wish to fight with the Trustee. Sometimes it's easier to appease the Trustee with $20/month than to spend $1,000 fighting the Trustee.

[IamOld]

Since you are in a Chapter 13, you can actually do what you mention. Just pay (pledge) an extra $20/month to the unsecured creditors! Make sure this is notated somewhere on the Plan so that the Trustee can clearly see it. The Trustee may still object, but you can always fight it out before the judge since the judge must confirm the plan anyhow.

Thanks Justbroke! Not in 13 yet - HOPE!!! to file w/in this month. I mean, for heaven's sake, 20 dollars? I'll leave it up to atty to handle as they see fit. But since I have (as of today) a total of $2,500 for my old age in 401k and spouse has about 1200, I'm not exactly sitting here with 100grand in the 401k! :-) 100grand - wish I were :-) :-)

Thanks again!!!!

[justbroke]

Since you are in a Chapter 13, you can actually do what you mention. Just pay (pledge) an extra $20/month to the unsecured creditors! Make sure this is notated somewhere on the Plan so that the Trustee can clearly see it. The Trustee may still object, but you can always fight it out before the judge since the judge must confirm the plan anyhow.

[IamOld]

Yes it is wild. However, the most Trustees are black and white. It would probably be best for you to payoff the loan and then keep the contributions at the maximum company match. The key here is that you are taking an "extra" $10/pay away from the creditors, since you are already making the "maximum" contribution to the system. (Most Trustees will only allow the "maximum" amount where you still get a company match. Anything higher would likely receive an objection.)

Sadly, I'm sure you're quite right and THANK YOU for the response.

Well, I reckon then I'm screwed, because between paying the very expensive atty, paying the mort car, etc., there's no way on earth I can pay this loan back. So then I hope that they accept me paying an "EXTRA" $20 per month to the creditors versus stopping my 401k. Oh well. I guess I'll be living in a box when I'm old - or better yet, I can declare bankruptcy again when I'm ready for SS, and be done with it...
NOW - I can ABSOLUTELY though show that this 401k loan went DIRECTLY to pay the lawyer!!!! and for NOTHING else.

[justbroke]

THANKS! But that is wildly silly isn't it? - I contribute about $130/pay to get my employer's full match PLUS the $10 loan. If there is protest, I would be happy to increase my payments to the "system" by $10 - to me, it would be wildly contrary to "public" policy for them to tell me to STOP 401k contribs because of $10 - would it not be satisfactory if I offer (IF this comes up) to raise my contribution by the said $10??

Yes it is wild. However, the most Trustees are black and white. It would probably be best for you to payoff the loan and then keep the contributions at the maximum company match. The key here is that you are taking an "extra" $10/pay away from the creditors, since you are already making the "maximum" contribution to the system. (Most Trustees will only allow the "maximum" amount where you still get a company match. Anything higher would likely receive an objection.)

[IamOld]

Absolutely! Whether it is $10 or $100, the Trustee needs to protect the rights of the unsecured creditors. Think of it this way. That $10 over 60 months is $600.

THANKS! But that is wildly silly isn't it? - I contribute about $130/pay to get my employer's full match PLUS the $10 loan. If there is protest, I would be happy to increase my payments to the "system" by $10 - to me, it would be wildly contrary to "public" policy for them to tell me to STOP 401k contribs because of $10 - would it not be satisfactory if I offer (IF this comes up) to raise my contribution by the said $10??

And/but I'm quite sure I'm not the only one with a 401k loan going into bankruptcy.....

[justbroke]

Thank you! In EVERY case? I have 401k contributions (I just got his job last year Dec and essentially have ZERO in the 401k until now) and have an outstanding 401k loan for 1200 with $10/pay...so that means that when I file the Trustee can object to my 401k contributions (and my balance now in total is around 2000K and I ain't no spring chicken) because of my TEN dollars per pay 401k repayment???

Absolutely! Whether it is $10 or $100, the Trustee needs to protect the rights of the unsecured creditors. Think of it this way. That $10 over 60 months is $600.

[IamOld]

I'm a little late here, but let me interject. The Trustee can oppose a 401(k) repayment if you are also still making 401(k) contributions. It's either one or the other, and the caselaw pretty much supports this view.

Thank you! In EVERY case? I have 401k contributions (I just got his job last year Dec and essentially have ZERO in the 401k until now) and have an outstanding 401k loan for 1200 with $10/pay...so that means that when I file the Trustee can object to my 401k contributions (and my balance now in total is around 2000K and I ain't no spring chicken) because of my TEN dollars per pay 401k repayment???