401K Withdraw

[aa06a47]

possumfat, If you know your filing bankruptcy then quit paying the unsecured debt, especially if your simply paying the finance charges with money from your 401k. If you not sure when your going to file, simply pay what you can but don't use that asset unless it is a life or death emergency. The creditors cannot get it unless it is setting in your bank account. The second you take the money out, it is money the trustee can get.

[possumfat]

what is CMI and the 6 month rule ?? Also I file over a year ago (Oct. 5th, 2005) and was discharged on January 17th, 2006.

[SinkingFast]

There have been cases where the 401K withdrawal has been considered in the 6 months CMI. 401K monies are earned income that is directly withdrawn from your pay, pretax. That's why some Courts are including 401K withdrawals in the 6 month CMI.

And if, the balance is in excess of $600, and you pay off the card within 90 days of filing, it will fall into the "Preferential Payments" area. The Trustee can go after the money.

So if you're gonna withdraw from your 401K, you need to ask attnys in your area if the withdrawal will figure into your 6 month CMI. You'll also need to be prepared to wait in excess of 90 days from the date of the payment to be beyond the "Preferential Payments to Creditors" time frame to file BK.

[BassBoy]

My understanding is that if you are discharged, you can withdraw from it without any interference from the Trustee.

[possumfat]

I really do appreciate everyone's advice and concern and I agree with you but when your in a position it has to come from somewhere this is where mine needs to come from. To put it in perspective the withdraw amount is less that 25% of the total 401K balance ).

The thing I need to know is can the trustee somehow get it if I withdraw it and pay the card off ? I don't think so but confirmation would helpful.

[SinkingFast]

We cashed out our retirement savings to pay bills.

Every attny we saw told us, "Do you know how much money I could have saved you if you'd have come and seen me a year ago?"

Retirement savings are protected in BK. You won't make more than a dent in your Unsecured Debt. Just keep the 401K for when you'll need it when you retire.

[BassBoy]

Persoanally, I wouldn't take away from a retirement plan.

[possumfat]

I know that withdrawing from your 401K to pay unsecured debts is bad but so is paying the finaince charge each month that barely dents the balance.

My question is: my case has been discharged but waiting for closing while the trustee takes his sweet time trying to get a payment from the credit card company i paid in the 90 period before filling. Case was a Chapter 7 filed
under the old laws.

Since the 401K was protected I don't see a problem getting the money to pay off the credit card...............any opinions would be greatly appreciated.

This something I need to do soon !!