Retirement loan while in Ch. 7

[bal_ny]

I've had an emergency come up and the only way I can get the funds for it are to borrow a couple of grand from my retirement fund. I don't particularly want to, but it is what it is.

Can I do that while in Ch. 7? Had my 341 in July and should be discharged around Sept. 10. Am I able to access this money prior to discharge?

[AngelinaCat]

Hi bal_ny: I'm so sorry to hear about your emergency. Are you sure you can't borrow the funds from a relative? Taking from your retirement fund--which you can do, I'm pretty sure; others will correct me if I'm wrong --is never a good idea if you can avoid it. Because it almost never gets paid back, and you are usually hit with a huge tax liability.

Good luck to you.

[BassBoy]

The one thing you wouldn't want to do is create/receive any assets while in active BK. Not saying the Trustee would be looking for it, but why run the risk? And I agree with AngelinaCat that you shouldn't raid your retirement funds if you do not have to.

[MomIcantFindmy]

I am not by any means advocating it however I have wondered...how would anyone even know if you received an asset after your 341? Say you sell a car that you own outright free and clear or do cash in retirement funds....how is that tracked to your BK? I guess I figured that the trustees are so swamped right now why bring on more work for themselves. Just stuff I have wondered....

--------71 Days and counting after 341-----

[momof5]

Our attorney made it very clear that we were NOT to touch our 401k even for a dime until after discharge/closing. He said to just forget the money even exists until that time.

[HHM]

Ahh, the catch-all excuse "emergency" for poor financial decisions.

I am willing to give you the benefit of the doubt, but unless someone is about to die in the next day and you need $5k to buy the treatment that will save them, it really isn't an emergency now is it

[bal_ny]

HHM, you made me giggle.

Nope, no one is going to die if I can't get the money. "Emergency" might be better called "something that's not the end of the world, but it would be a huge load off my mind if I could take care of this."

Thanks for your responses, everyone.