What Happens to My 401(K) in Chapter 13 Bankruptcy?
In most cases, reasonable 401(k) and other retirement plan contributions can be continued depending on whether you are capable of meeting your statutory obligations while contributing to your retirement plan.
Can I Continue to Make 401(K) Contributions During Chapter 13 Bankruptcy?
Unfortunately, there is no definite answer to this question. It depends on your situation and the particular venue in which your case is filed. Sometimes, voluntary retirement contributions, like those for 401(k) plans, are not considered necessary expenses in bankruptcy cases. This means that they may be put on hold as part of the repayment plan. In other jurisdictions, 401(K) or other retirement plan contributions may be continued if they were ongoing, but may not be started within the 6 months before filing.
When you file for Chapter 13 bankruptcy, your lawyer will advise you about whether you should try to keep making payments to your 401(k) or other retirement plan. Then, the court will make a final decision about ongoing retirement contributions in your particular case when the repayment plan is reviewed.
What Happens to Required Retirement Loan Payments and Contributions After Filing Chapter 13?
Payments on a retirement loan are included in your necessary monthly expenses. That means that you will be allowed to continue making payments during the bankruptcy repayment period. If you pay off the retirement loan after filing for Chapter 13, your disposable income will be recalculated, and your repayment plan will be modified.
Sometimes retirement contributions are required as a condition of employment. You will be allowed to continue to make these types of involuntary contributions while working on your Chapter 13 repayment plan.
Contact Our Chapter 13 Bankruptcy Lawyers for a Free Consultation
If you’re considering filing for bankruptcy, you need reliable legal advice. Experienced bankruptcy lawyers know how to protect your financial assets and guide you to the best possible outcome. For solid legal assistance in Chapter 13 bankruptcy cases, contact Amourgis & Associates at (844) 218-2721.
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At Amourgis & Associates, Attorneys at Law, we only represent consumers. We fight for regular people who have been seriously hurt in accidents. We fight for people who are being crushed by overwhelming debt and need a fresh start. We fight for individuals and families. Never businesses. Never insurance companies. We are loyal to the consumer.
