Legal Question in Bankruptcy in Florida
I am in Chapter 13 in Palm Beach County, Florida. I have paid 36 of 60 required payments. If I were to take proceeds out of my 401K to pay the balance off, can I do this without penalty? Basically, I want to get on with my life and get my bankruptcy discharged.
Asked on 1/15/12, 10:50 am
1 Answer from Attorneys
R. Jason de Groot
R. Jason de Groot, P.A.
It seems to me that a craftee trustee could argue that the exempt status of your 401K means nothing to you. When you make an early withdrawal from a 401K you cannot avoid the penalty and taxes associated with it. Look into whether you can borrow against it first. You are more than half way through the payment plan. Speak with your attorney about this.
Answered on 7/05/12, 12:00 pm
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