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Can I continue my 401K deductions in chapter 13? Can I increase my 401k if I get a raise?

Las Vegas, NV |

I have not had a raise in 9 years, if I finally should get one, will this also increase my payment in my 13?

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Attorney answers 3


In Las Vegas, the Chapter 13 Trustee will not allow you to take the expense of a voluntarily retirement deduction in making the decision of what you can afford to pay through the Plan. If you wish to continue making your 401K contribution, you may end up having to cut something else from your budget.

If you receive a substantial raise, your Chapter 13 Trustee could ask that your Plan payment increase, but if the raise is modest, say less than 10%, it is unlikely this will happen. In either case, it is unlikely you will be in a position to increase funding your retirement until after you complete your Plan.

Hope this perspective helps!



Thank you for your timely answer. Our pension was eliminated during the companies BK. Do you think the trustee can or would consider a exception or is it pretty cut and dry?

Dorothy G Bunce

Dorothy G Bunce


In Las Vegas, both Chapter 13 Trustees want all your available income & do not want money going to pensions. :(


I've had Chapter 13 trustees go both ways on this. Worst case scenario is you try it and the trustee objects. Many want to see the debtor making the best efforts to pay back their creditors. Saving for retirement, while always wise, does not always show "best efforts."

Increasing your contribution with a pay raise is likely to draw an objection, but again it depends. If you can repay more debt, the trustee would kind of like to see you do that.

If you get a raise, the trustee will likely want your plan payment to increase. If you got a pay cut, you would likely want to reduce the plan payment. It cuts both ways.

Note: all of these answers presuppose that you will be paying less than 100% of your debt back. If you can pay 100% of your debt back through the plan, the trustee won't be very interested in your pay increases.

Finally, fewer than 5% of people who file Chapter 13 on their own are successful. You really need to sit down, interview, and then hire an attorney for the greatest chance of success. There are some good ones here on Avvo. Good luck to you.

This answer does not create an attorney-client relationship between you and I. I am not your attorney unless we both sign a written contract that describes our relationship and terms of the representation. Any information provided to you here is not a substitute for the advice you need to pursue any legal matter. I advise you to retain the services of a local attorney before taking any legal action in this matter.


In recent years, bankruptcy courts around the country have been divided over whether a Chapter 13 bankruptcy filer can continue to make payroll contributions to a retirement plan during the Chapter 13 repayment period. In a recent case, the Bankruptcy Appellate Panel of the 9th Circuit ruled that Chapter 13 debtors cannot continue such voluntary contributions during Chapter 13 bankruptcy. In re Parks, No. 11-1366 (9th Cir. BAP, Aug. 6, 2012).

No Voluntary Retirement Plan Contributions During Chapter 13

The court ruled that when you file for Chapter 13 bankruptcy you cannot make voluntary contributions to a retirement plan (such as a 401(k) plan) through payroll deductions. Instead, you must devote that money to your Chapter 13 plan. (Learn more about the Chapter 13 Repayment Plan.)

Some courts in other areas of the country have allowed Chapter 13 debtors to continue retirement plan contributions, especially if the debtor is near retirement age.

The materials available at this web site are for informational purposes only and not for the purpose of providing legal advice. You should contact your attorney to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an attorney-client relationship between Howard Roitman, Esq. and the user or browser. The opinions expressed at or through this site are the opinions of the individual author and may not reflect the opinions of the firm or any individual attorney.

Hale Andrew Antico

Hale Andrew Antico


Good call on Parks. Notwithstanding whether the BAP is controlling authority and whether it erred in looking to Egebjerg, it all comes down to "know your trustee." Some won't object.

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