Can a 401K plan be levied to satisfy a money judgment?

[tony_apples]

What is the name of your state? nys

I have been named in a lawsuit. If the plaintiff is successful in securing a judgment, can they take my 401K?

I don't know if this complicates things: I am a resident of NYS, but I work in NJ (so the company sponsoring my 401K plan is a NJ company)

If they can attach the 401K, I will stop deferring money into it!

Thanks!

 

[cbg]

The state you are in is irrelevant. 401k's are governed by Federal law.

Important question: are you still employed by the company that sponsors the 401k? This question makes all the difference to the answer to your question.

 

[tony_apples]

Thanks for replying.

Yes - still employed at the company - I just started working here in middle July, and I just began contributing to the 401K plan.

If it matters, I understand the complaint was filed in late April, in California.

I was asking because if my 401K were at risk, I wouldn't contribute until this mess is behind me.

The state you are in is irrelevant. 401k's are governed by Federal law.

Important question: are you still employed by the company that sponsors the 401k? This question makes all the difference to the answer to your question.

 

[cbg]

Your 401k is not at risk. Under Federal law, there are only VERY limited instances when 401k money can be touched while you are still employed by the sponsoring employer due to its pre-tax status, and even then only if the plan document permits. A judgement against you doesn't even come close to any of the qualifying reasons.

 

[tony_apples]

Wow...that is quite a relief...thanks much.

I will go for the full 15%. This company matches 50% WITHOUT A LIMIT...so it would really be horrible to not contribute.

Thanks very much for taking the time to reply.

Your 401k is not at risk. Under Federal law, there are only VERY limited instances when 401k money can be touched while you are still employed by the sponsoring employer due to its pre-tax status, and even then only if the plan document permits. A judgement against you doesn't even come close to any of the qualifying reasons.

 

[tony_apples]

one more thing...

I would like to open an ING savings account. If the account is opened solely in my wife's name (she wasn't involved in the corp., and wasn't named in the suit)...would that be safe?

 

[cbg]

I don't even know what an ING savings account is. You might do better to ask this question in the banking section.

 

[Some Random Guy]

If you are opening a savings account to put your assets into her name, then you are opening yourself to charges of fraudulent conveyance, and can get in heaps o' trouble.