Posted on
May 31, 2010
at
5:24 am
Will filing for bankruptcy affect my 401k
Posted on
May 31, 2010
at
5:26 am
If the consumer takes out money from their 401k it would be considered as available money and not anymore under retirement accounts - which are safe from bankruptcy seizure.
Posted on
May 31, 2010
at
6:57 am
Can bankruptcy (in any state) take the consumer's 401k
Posted on
May 31, 2010
at
7:02 am
The federal government sets up bankruptcy laws
but states can opt out of certain federal exemptions and create their own. In the 2004-2005 term, the U.S. Supreme Court is scheduled to hear Rousey v. Jacoway, a case that argues the merits behind exempting IRAs from bankruptcy. Though states can define their own exemptions, most states pattern them after federal law. If the Court rules that IRAs are exempt, the 42 million Americans who have IRAs will be protected should they be faced with the misfortune of bankruptcy or a lawsuit. -
http://otd.oyez.org/articles/2004/08/30/protecting-ira-and-401k-nest-eggs-bankruptcy
Posted on
May 31, 2010
at
7:06 am
But any good financial adviser would not encourage bankruptcy filing or cashing out the 401(k). But opinions vary. So it would be wise to see a debt consultant before making any major decision. Also, look into bankruptcy alternatives first.
Posted on
May 31, 2010
at
7:29 am
Right, and those alternatives would be credit counseling, for balancesbelow $10k with current accounts, and then debt settlement, for balances$10k plus and past due accounts. I would not advice on debt consolidationloans because it would just add up to your debt. Nobody should take outa loan on a bad credit standing.
Posted on
August 30, 2010
at
5:16 am
If you are unable to repay a 401k loan as per schedule, it will be automatically seen as a withdrawal from your retirement account and you will be taxed accordingly and you will be charged an additional 10 percent of the unpaid amount as penalty if you are less than 59 ½ years of age.
