In most jurisdictions, 401K distributions are not counted as income because they are simply withdrawals from an existing asset. The loan versus gift issue needs to be sorted. If it's a gift, then probably. If a loan, probably not. If it is really a loan, then you must list the relative as a creditor. Please consult an experienced bankruptcy attorney in your area for further information.
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I agree with counsel's answer. The scrutiny will be on the transaction with the relative-was it an arm's length transaction? -and the timing of the Chapter 7 filing.
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My understanding is that a 401(k) distribution is not considered income for purposes of Chapter 7 bankruptcy. The $3000 from your relative could be considered income if it is a gift. However, if it is deemed a loan, then it is not considered income but you must list the relative as a creditor. If you are considering bankruptcy, it would be a good idea to speak with a bankruptcy attorney and make all preparations necessary for the filing.
Loans are not income. Whether or not what you received was a loan might be debatable, but if everything is properly scheduled I doubt that it would draw much scrutiny.
Even if it was considered to be income, I would be surprised if such a small amount of money would put you out of reach of a Chapter 7. There is nothing wrong with doing your own research beforehand, but at this point I think it would be best if you scheduled a free consultation with a local bankruptcy attorney.
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