Welcome! | Ask A Question

 
 
Question

Asked 6/6/2008

If i am in a chapter 13 bankruptcy can i borrow from my 401k

If i am in a chapter 13 bankruptcy can i borrow from by 401k without raising any red flags

 
 
 
 
Answers

Answer 1/1 - Submitted 1/30/2012

No, you should not borrow from your 401(k) while you are in a chapter 13 bankruptcy, at least not without the permission of the chapter 13 trustee.

The goal in bankruptcy is that all your creditors be treated equally and that they be paid back a percentage to the best of your ability. If you bring additional funds into your budget by borrowing from a retirement account, the trustee will wonder what you are doing with those funds, because it will look like you don't want to use them to pay on any of your debts.

If you need this money because you can't afford your daily expenses while you're making your chapter 13 plan payment, then perhaps your plan payment is too high and it should be discussed with your attorney whether you can lower your plan payment.

Chapter 13 debtors can take out financing while they are in chapter 13 if necessary. For instance if your car breaks down while you are in chapter 13 and you need to buy a new one, you can file a motion with the court to have them approve you taking out a new loan to finance a necessary purchase.

Any change to a debtor's financial situation while in chapter 13 should be brought to the attention of your attorney and your chapter 13 trustee to see if the chapter 13 plan payment should be adjusted.

 
 
 
 
Answer This Question Now

Type your Answer in the box below and post your answer.

Learn more about how this works

 
 
 

Related Questions (Ask a New Question)

 
Will filing bankruptcy prevent my tax refund from being taken even if only temporarily.?

I know student loans are rarely discharched in bankruptcy unless it would cause undo hardship to repay or if the loan went into default 7 years prior to filing for bankruptcy, both of which apply to me.

See Answers

 
If i'm not filing for bankruptcy, only my husband. will my inheritance be affected?

My husband is filiing for bankruptcy. i am not. i may be receiving an heritance, possibly before the discharge or soon after. will the inheritance have to be claimed to pay back his creditors if it's within the 180 days from filing? he will not be filing any joint debts.

See Answers

 
Ex husband filing for bankruptcy

My ex husband is filing for bankruptcy we had no joint debt and he owns the house which i have moved out of. we are filing seperately for taxes. we had an agreement before he decided to file for bankruptcy to split any tx refund or tax debt. he is now telling me that the court might take his refund...

See Answers

 
Related Questions

Will filing bankruptcy prevent my tax refund from being taken even if only temporarily.?


I know student loans are rarely discharched in bankruptcy unless it would cause undo hardship...

 

If i'm not filing for bankruptcy, only my husband. will my inheritance be affected?


My husband is filiing for bankruptcy. i am not. i may be receiving an heritance, possibly...

 

Ex husband filing for bankruptcy


My ex husband is filing for bankruptcy we had no joint debt and he owns the house which i...

 

If you file for bankruptcy what, if any, tax implications are there?


If someone is filing for bankruptcy, are you taxed on the property that you claim in the bankruptcy,...

 

How do you do a self bankruptcy filing?


So since you can file bankruptcy for yourself, how do you do it? it has to be done in exactly...

 

What is a quitclaim when filing for bankruptcy?


I am filing for chapter 13 bankruptcy?

 
 

See more Bankruptcy questions

 
 
 
 
 

Ask A Question

Ask a new question about
Bankruptcy: