401 and bankruptcy

[easementowner]

What is the name of your state?wi
I am considering bankruptcy to dismiss a frivolous lawsuit by neighbor, and an unrecorded mortgage.

My home is depreciated significantly due to neighbor dilapidated house, and sewer laterals that are 11 inches into neighbor property on my exclusive driveway easement. My attorney says I will win, but will spend 50,000.

I went to see a bankruptcy attorney. He gave me a spreadsheet to fill out and on paper I met his guidelines for bankruptcy. One of things he didn't take into account is our 401 deductions. I emailed him today, but haven't heard back yet.

I didn't realize until today that the 401 deductions total 19,000 a year between my husband and I. What will the trustee say about this? Is it just listed as an expense?

Thank you for your assistance,

Sandy

 

[Ladynred]

That kind of contribution is likely to be added back into your disposable income numbers. Contributions are voluntary, you are not obligated to put that money into the 401K, so the Trustee could easily reason that that money could go to paying your bills and push you into a Ch 13. The 401K accounts themselves are untouchable (thanks to a recent Supreme Court decision).

I suggest you ask your lawyer about the contributions, it could cause problems.

 

[easementowner]

Thank you

Ladynred,

Thank you so much. I am still waiting for my attorney to respond to my email. I really appreciate your responding.