• FreeAdvice has a new Terms of Service and Privacy Policy, effective May 25, 2018.
    By continuing to use this site, you are consenting to our Terms of Service and use of cookies.

401K loan effect on filing?

Accident - Bankruptcy - Criminal Law / DUI - Business - Consumer - Employment - Family - Immigration - Real Estate - Tax - Traffic - Wills   Please click a topic or scroll down for more.

chinabloo

Member
What is the name of your state? Ohio

My husband and I have been considering filing chapter 13 bankruptcy. (Due to the downturn in the consulting industry since the Anderson scandal and 9/11, he may has well been unemployed since early 2002.)

I have an outstanding loan against my 401K. Payments are taken out of my check automatically every paycheck to pay this back. There is no way for me to stop paying this back and just have the amount converted to a taxable distribution unless I leave the company.

The attorney we met with told me that because of this, filing wouldn't really do us any good because I am paying myself back at 100% and then will have to pay all the other creditors back at 100%.

Do you concur with his opinion?
 



Find the Right Lawyer for Your Legal Issue!

Fast, Free, and Confidential
data-ad-format="auto">
Top