HELP Please - Seriouse Advice needed re: job loss, chapter 7 and 401k withdraw
I had to go out on medical leave in October, Short term disability (STD) only approved a months worth of pay but due to my FMLA, I was granted 12 weeks out with my job held. Unfortunately I needed to take the entire 12 weeks, when it was time for me to return to work, my doctor still wanted me out for another 6 weeks. To make a long story short, I resigned from my job of 9 years.
My husband and I seperated in July but on October 1, he moved back into our townhouse and my son (4 years old) and I moved into an apartment (my leave was sudden and first day out of work was Oct 28, I believe) so when I rented the apartment I fully expected to be working.
I am in severe debt, mainly credit cards easily adding up to about 35 -40K. I have no income and haven't for months now. My parents have helped as much as possible, I took a loan from them and then they just would give me money to pay the rent, etc... and now they are in a really hard spot especially since I stopped paying my personal loan back to them (they had taken out a second mortgage for that). My parents are older, my dad is 78 ad going in for double bypass heart surgery next Friday and as he told my sister, they have no "padding" if something were to happen.
I know that my only option is to file Chapter 7 and I need to research the cheapest but best way to do this but here is my main question. Now that I am seperated from the company, I am able to withdraw my 401K, I already have two loans out on it and after taxes i would end up with about 24K. I need money to pay my rent for February and bills that are way past due and my parents really need money to survive, they are both retired. I know I can put the money in an IRA and withdraw as needed and it is my understanding that it cannot be touched by bankruptcy, correct? But what if I straight withdrawl the 24K for living expenses and give the remaining to my parents for the loan repayment? Will I still be elidgeable to file bankruptcy or will withdrawing the 401K mean they would require me to put the money towards the debt? I'm barely putting food on the table. My husband (we are seperated) gives me money when he is able but he is also struggling very much w/ just the mortgage and regular bills. I have our son 90% of the time so I'm trying to keep the both of us fed, cleaned, warm, etc...
So ideally, what I would like to do is withdraw the 24K from 401K, keep some for rent, heat, water, etc... for at least two maybe three months and repay my parents the rest toward the loan I owe them, which is a second mortgage on their house and file Chapter 7 all around the same time. Is this possible. Is my only option to put the money in an IRA so that it doesn't get touched. I don't know what to do. My doctor still isn't giving me the ok to work, she said we will reevaluate in another 2 weeks. I'm dealing with alot of health issues, depression, severe migraines, insomnia, falling asleep during the day while driving, drinking coffee and dropping it everywhere and it goes on. So, I am not fit to work right now, I think alot of it is due to the emotional stress of my seperation with my husband, we have been together 10 years and have a 4 year old.
Anyway, there's my story. I'm very sorry that it's so long but if you can take the time to read it and give me some solid advice, I would very much appreciate it.
Right now I'm at the point where I'm planning to go apply for food stamps tomorrow which is something I thought I would never do but I am literally barely able to food on the table.
Any advise is appreciated. Thank you in advance.
My husband and I seperated in July but on October 1, he moved back into our townhouse and my son (4 years old) and I moved into an apartment (my leave was sudden and first day out of work was Oct 28, I believe) so when I rented the apartment I fully expected to be working.
I am in severe debt, mainly credit cards easily adding up to about 35 -40K. I have no income and haven't for months now. My parents have helped as much as possible, I took a loan from them and then they just would give me money to pay the rent, etc... and now they are in a really hard spot especially since I stopped paying my personal loan back to them (they had taken out a second mortgage for that). My parents are older, my dad is 78 ad going in for double bypass heart surgery next Friday and as he told my sister, they have no "padding" if something were to happen.
I know that my only option is to file Chapter 7 and I need to research the cheapest but best way to do this but here is my main question. Now that I am seperated from the company, I am able to withdraw my 401K, I already have two loans out on it and after taxes i would end up with about 24K. I need money to pay my rent for February and bills that are way past due and my parents really need money to survive, they are both retired. I know I can put the money in an IRA and withdraw as needed and it is my understanding that it cannot be touched by bankruptcy, correct? But what if I straight withdrawl the 24K for living expenses and give the remaining to my parents for the loan repayment? Will I still be elidgeable to file bankruptcy or will withdrawing the 401K mean they would require me to put the money towards the debt? I'm barely putting food on the table. My husband (we are seperated) gives me money when he is able but he is also struggling very much w/ just the mortgage and regular bills. I have our son 90% of the time so I'm trying to keep the both of us fed, cleaned, warm, etc...
So ideally, what I would like to do is withdraw the 24K from 401K, keep some for rent, heat, water, etc... for at least two maybe three months and repay my parents the rest toward the loan I owe them, which is a second mortgage on their house and file Chapter 7 all around the same time. Is this possible. Is my only option to put the money in an IRA so that it doesn't get touched. I don't know what to do. My doctor still isn't giving me the ok to work, she said we will reevaluate in another 2 weeks. I'm dealing with alot of health issues, depression, severe migraines, insomnia, falling asleep during the day while driving, drinking coffee and dropping it everywhere and it goes on. So, I am not fit to work right now, I think alot of it is due to the emotional stress of my seperation with my husband, we have been together 10 years and have a 4 year old.
Anyway, there's my story. I'm very sorry that it's so long but if you can take the time to read it and give me some solid advice, I would very much appreciate it.
Right now I'm at the point where I'm planning to go apply for food stamps tomorrow which is something I thought I would never do but I am literally barely able to food on the table.
Any advise is appreciated. Thank you in advance.
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