Hello I am a licensed attorney here to help you with your question, please review my response and do not hesitate to ask for clarification.
How much will you take out?
around $20,000 after the current loan is paid off
How many more payments do you have left? What is the total balance?
I am looking
2 years and 4 months. we pay $1,870 per month.
How much do you have in your 401k?
around 50k. We currently have a loan for 8k that has to be paid off first. Once that is paid off we can take out $30k
The issue here is complicated:
Under the Bankruptcy code: you have to obtain permission from the Trustee when you are obtaining a loan,
Any credit purchase you makewithout approval of the court will be illegal, the goods would have to be returnedand you very likely would be out any payment you had made. You would also place yourplan in serious jeopardy if you obtain credit without approval.
That is the law:
However, in many cases since your loan is from your exempt 401k, the trustee in mosts cases will allow it, especially if you have a valid reason for the use.
The worst that can happen is that the trustee asks that the money taken be put into the plan, or files a motion to dismiss.
Once you remove the exempt amounts, it becomes part of the bankruptcy estate.
I guess that is what we were most worried about - getting it dismissed at this point.
our attorney had told us that our monthly payment would be no more than $1500 per month and then it was 1870. it is our own fault = thanks for your answer.
In your situation, if you need the money, I would try to obtain permission if it is not given consider having the chapter 13 dismissed, and use the money for what you need, and refile another chapter 13, this way you would have a new 5 year plan with lower payments.
The payments would be lower since some of the debts were already paid.
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