My wife and I are considering a Chapter 7
filing in Illinois.
We currently bank with "big bank" which will be named as a creditor if we file as we have some outstanding debt, business and personal with them.
We know to pull any funds from our checking/savings account prior to filing to avoid set-off.
My wife is currently in the process of doing a direct rollover of an old 401K
(let's say it's from ABC to pick a name) into a new account (we'll call it XYZ). She is being assisted in this process by someone in the investment dept of "big bank" however the rollover check is coming directly to her from ABC and is made out to XYZ.
I have the same 401K already in place and "big bank" shows it as a house account. Not sure exactly what that means for the sake of this discussion other than they helped me set up my 401K years ago with XYZ and they can view the account. All transactions related to this account are done through XYZ.
My question is....do you think we could be in any danger of a "set-off" scenario? Does "big bank" have any avenue or legal right to touch any funds related to an exempt 401K, whether it's a "house account" or not? Or whether it's a rollover transaction in process?
I hope that description made sense?