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

Posted on: 07th Feb, 2009 11:31 am
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.
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.
Posted on: 13th Feb, 2009 01:05 am
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