Listen to my colleague Dorothy.
The issue is not so much "can" you but "should" you. Unless you are at retirement age, withdrawing from the 401(k), either inside or outside BK is a bad idea. Where I practice we don't usually need to seek trustee permission, but the problem is the potential tax liability. If you will need to pay tax next year when you do your taxes, that may blow-up your plan. The other issue is that it creates income. In districts where the trustee monitors tax returns, the 401(k) withdrawal will usually put you over the allowed percent increase and trigger a review of your case. You don't want that.
Whatever it is you think you need the money for, either find another way or seriously reconsider the "perceived" need.
Don't!!!!!!!!!!!!!!!!!!! If you are not at least 59.5 years old, the Feds will take about half in taxes and penalties. Moreover, you will be converting an exempt asset into a non-exempt asset. PLEASE discuss with your attorney BEFORE doing anything. Good luck.
Be sure to designate "best answer." If you live in Oregon, you may call me for more detailed advice, 503-650-9662. Please be aware that each answer on this website is based upon the facts, or lack thereof, provided in the question. To be sure you get complete and comprehensive answers, based upon the totality of your situation, contact a local attorney who specializes in the area of law that involves your legal problem. Diane L. Gruber has been practicing law in Oregon for 26 years, specializing in family law, bankruptcy, estate planning and probate. Note: Diane L. Gruber does not represent you until a written fee agreement has been signed by you and Diane L. Gruber, and the fee listed in the agreement has been paid.
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