Dazed and Confused

[Meesch]

Filed ch. 7 in February, had 341 meeting in March, trustee "suggested" that since I did not include my 401k on my schedule, that I amend the schedule to include. Here's the deal, I took out a loan on the 401k back in June 2004, since July I've been repaying that loan (to myself @ $170/month). I informed my employer of my ch.7 filing (I had 3 wage garnishments pending). Now, the trustee states that the amount I'm repaying could be used to pay back creditors and my case could be converted to ch.13, which I definitely don't want (no re-payment plans please). What do I do? Could my employer fire me due to filing of the ch.7/not repaying the loan after signing the promissory note to do so (pay back over 72 months). Please HELP!!!

[HHM]

As far as a I know, not repaying your 401k loan is not grounds for employment termination. However, if you don't repay, there are severe tax penalties.

It sounds like you don't have an attorney, is that correct? But with 3 garnishments, and a 401k issue, you should probably have hired one.

If the $170 per month is enough to kick you into a chapter 13, my guess is you underestimated your living expenses. Also, if your's is a typical 401K loan, its not really considered a loan under the BK code so you can't really discharge it in the bankruptcy.

Your main option is that you should probably hire an attorney at this point. In addition to the 401K issue, if your wages are being garnished, that means their are creditors out their with judgments against you, and judgments are NOT automatically discharged in BK. You have to file a Motion to Avoid Lien, assuming the underlying debt qualifies for such lien avoidance. You could voluntarily dismiss your case, but then you cannot refile for 6 months, and the garnishments would start back up again.

The long and short of it, you need an attorney.

[Meesch]

Dazed and Confused

Yes, I filed pro se. Does it matter that I had in excess of $30k of unsecured debt. The wage garnishments ( auto loan - garnished wages for past 3 years only to find out that I've only been paying back interest on the loan) and a city parking garage had served the EWO a week before I filed). Being a naive girl, I let other family members get an apartment in my name (which resulted in the 2 judgments on file). Should I amend the schedule to include the 401 or does it matter at this stage?