Paying to much into my 401(k)

[mtndewdrinker]

Some devastating news to my family. We were in the very ends of a long Ch13 converted to 7. Even had our hearing with the trustee in which everything went well. We were facing presumption of abuse because of my wifes employment change and the court UST upheld our position on that (accepted the reasons) and then we took our final credit counselling course...all set. The feeling of burden lifted as we started enjoying the fresh start of doing things right for a change. When alas - days prior to our discharge we get a legal notice from the courts stating that they decided to dismiss the 7. According to the papers and seconded by my counsels interpretation. They state that we are a young family and that we "don't need to be contributing to our 401(k) at the level we are and that we can "recover"". I'm heartbroken and devastated. The only remaining options mean more money which I'm not sure I can afford.

[LSUTiger32]

Sounds like age discrimination to me. How can they base what you are putting into your 401K by your age?

[aces67]

Is your lawyer willing to fight this? The UST pulled a presumption on us. He had a lot of reasons but one of his was we were contributing to much to the 401K.

You can still win this if your lawyer is willing to fight it out. Ultimately the judge has the final say. Sometimes the UST may not be willing to take it to that level and he will drop it instead.

Good Luck!

[mtndewdrinker]

Our lawyer has offered the fight as one of the options. I'm just worried about what those additional lawyer fee's will be vs chances of winning... definitely an option i'm weighing.

[justplaintired]

We were told not to contribute into our 401K while in BK, it sounds like this attorney should have advised the same. Perhaps another attorney might be your best bet.

[liz417]

We were told not to contribute into our 401K while in BK, it sounds like this attorney should have advised the same. Perhaps another attorney might be your best bet.

Unfortunatley, I was told the samething...no 401 contributions during BK...

I say let your attorney fight it, what do you have to lose?

[aces67]

If you don't mind my asking exactly how much per month are you contributing? Is it really enough to make a substantial monthly payment with?

[mtndewdrinker]

If you don't mind my asking exactly how much per month are you contributing? Is it really enough to make a substantial monthly payment with?

Contributing a little over 500/month

[Flamingo]

Contributing a little over 500/month

Not too many insolvent (bankrupt) folks can afford to save $500 a month in their 401(k). There is no age discrimination involved here - that is a lot of money. Are you actually bankrupt?

[mtndewdrinker]

Believe me there is no doubt that we are bankrupt. I wouldn't wish this pain on my worst enemy lest go through it myself.

[jribe]

Believe me there is no doubt that we are bankrupt. I wouldn't wish this pain on my worst enemy lest go through it myself.

what percentage of your income are you contributing? The normal amount is 6%; assuming your employer matches that amount. I would say that is a reasonable amount, if you don't contribute as much- you're leaving money on the table.

Now, if the trustee is seeing you contribute say 15% of your income- i could see why they would object to that amount. They would obviously assume that that extra amount could go towards paying bills.

[shabam]

$500 per month is a lot considering someone is filing / has filed. I have not seen too many cases where people have been able to get away with that. BK courts usually upheld the dismissal when such cases went to trial.

A trip to bk court could end up costing a few thousand in legal fees. Unlike a AP, win or lose, the trustee will not be paying your legal fees. Something to keep in mind.

Why not reduce it to $200? or even $150 a month.

[LSUTiger32]

If you are that "bankrupt" then what do your schedules look like? If you reduce the 401K down to $200 you might still have a negative left over at the end of the test. Have you looked at your numbers?

[CCCrazy]

I continued to contribute to my 401K all thru my BK - it was 6% of my income. The trustee didn't blink at that.

[aces67]

If you are that "bankrupt" then what do your schedules look like? If you reduce the 401K down to $200 you might still have a negative left over at the end of the test. Have you looked at your numbers?

I agree with this. Would you still be negative without that 401K money?