? re tax refund & buying a vehicle after filing

[lostinflorida]

Hi all, we recently filed Ch 7, had our 341 1/28/09, seemed to go well. The bk trustee never said anything to us about our tax refund for this year, but we did hear him tell the lady before us that she would need to submit her tax returns to him and that he would probably be taking her refund or at least part of it.

Does the trustee always take the tax refund? Reason I'm asking is because we would like to use ours to buy a used vehicle. Does it mean anything that the trustee didn't tell us that or will we receive some kind of notice through the mail or something?

We found a really good deal on a nice used vehicle for $2200, of course we would need to pay cash since our credit is shot, and we just received our tax refund......

My other question is...if we buy this vehicle and pay with cash (either with the tax refund, or if we can't use that, then out of our 401K) is there any possibility that the trustee could come after it since we won't be discharged until sometime in April most likely?

Hope someone knows the answers, because we really need to move on the vehicle pretty quickly if we are going to get it.....and of course we really need a vehicle to get to work in the event that we ever finally find a job!

Thanks in advance for any help.

[shabam]

Please do not withdraw anything from your 401K. This is probably the number one mistake people make prior to filing for BK.

Also keep in mind you need to look at your states exemptions. If you have a vehicle with more than x in equity (different for each state), then they could possibly sell it to retrieve any excess equity to distribute to the creditors.

[lostinflorida]

Please do not withdraw anything from your 401K. This is probably the number one mistake people make prior to filing for BK.

Also keep in mind you need to look at your states exemptions. If you have a vehicle with more than x in equity (different for each state), then they could possibly sell it to retrieve any excess equity to distribute to the creditors.

We have already filed and had the 341....does that make any difference?

[StartingOver08]

Yes, the fact that you have filed already makes a big difference.

The means test is as of the filing date - not afterward. The reason people say not to take funds from your 401k is because of the tax implications AND the fact that the withdrawals add to your income prior to filing. Also, of course, you have hurt your retirement funds in the long run by taking early distributions.

But if you decide to pay cash for your car, why couldn't you increase your payments to your 401k after your discharge to make up for the $2200 withdrawal? Just a thought.

[shabam]

We have already filed and had the 341....does that make any difference?

Okay little different story. It might be a good idea to wait for the case to be over, just to be safe, before considering it. Then again, pretty much every financial adviser will tell you that withdrawing from a 401K is almost never a good idea.

I would exhaust every single other option before considering that one.