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Can I withdraw some money out of my 401K account after i filed chapter 13?

Hampton, VA |

We had a couple of problems that came up and money is short so we need about 1500 to get over the hump. Would it be alright to withdraw this amount?

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Attorney answers 3


Are you pre or post confirmation?

If you had an attorney represent you, please call him or her and ask this question.

Pre-confirmation, I'd be very careful about doing anything like this because while the money in your 401K account is likely NOT an asset of your bankruptcy case, you want to wait for the Chapter 13 trustee to see and pass on it.

Post-confirmation, again the issue is whether the asset has been deemed to be not an asset. The general rule is that your retirement accounts are exempt because they are not an asset of your estate. But the amount of allowed exemption, and even the status of the exemption is a function of Virginia law on exemptions. The guiding rule for retirement accounts is that they are not property of the estate. There is a different guideline for other assets that are property of the estate.

One would want to make sure that the asset was disclosed and exempted properly before he or she moved it out of the retirement account into an non-protected bank account.

You said you needed $1500. If it were a more significant amount of money, it may also come back and bite you in the but if the money can be viewed as the trustee as available for your disposable income.

If you paid an attorney to file your case, then you paid to have this question answered.

Call your attorney. And if you didn't have an attorney, and are pre-confirmation now might be a good time to find an attorney to pick up your case.

Good luck!


Although I agree that your own attorne should be answering this question, in a Chapter 13, you still keep the ownership interest in all your property, including yor 401K. So I wouldn't see any problem with you making a withdrawal from your account.

However, it would help to know your age & the total amount in the retirement account.

Good luck!


A 401 K is not an asset of the bankruptcy estate. If you do withdraw the money, be prepared to explain what happened to it. If you are represented by counsel, talk to your attorney first.

[This communication is intended as general information and not specific legal advice, and this communication does not create an attorney-client relationship.]