Can I legally cash out my 401K while in Chapter 13?

accord05rocks · Joined: 04 Feb 2009 Posts: 4 2.22 Dollars($)

The company that I originally worked for shut down due to the lousy economy. However, the new owner has re-hired me but does not offer any type of retirement plan. I want to cash out my 401K but am getting ready to file Chapter 13. Would that be legal? Would the Trustee need to be involved? I live in Missouri if that makes a difference. I know that it is never a good idea to do this but I need to fix my car and have no other options other than acquring more debt which I don't want to do.Thanks for any input.

Niicss · Posted: Fri Feb 13, 2009 2:05 am Post subject:

Hi accord05rocks,

As far as bankruptcy is involved, it will be better if you involve a trustee in this case. I don't think it will be good option to take a loan from your 401k account just before filing bankruptcy. You can speak to your bankruptcy attorney in this regard before taking any decision.

Thanks.

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