Can I withdraw my 401k during a bankruptcy to pay off student loans that are 3 months behind?
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Can I withdraw my 401k during a bankruptcy to pay off student loans that are 3 months behind?
I am going to court to meet with creditors in 10 days for my bankruptcy case. Will this hurt my case in any way?
Asked on October 24, 2013 under Bankruptcy Law, Kentucky
Answers:
Terence Fenelon / Law Offices of Terence Fenelon
Answered 11 years ago | Contributor
I would advise you not to withdraw the funds until after the meeting of creditors. Doing so would change the nature of the funds from exempt to non-exempt, and thus, unless you have room under your personal property exemption to shield the withdrawal, could render them assets of the estae. Wait 10 days to play it safe.
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