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FiveStarLaw
FiveStarLaw, Attorney
Category: Bankruptcy Law
Satisfied Customers: 36561
Experience:  Bankruptcy Lawyer. Experienced.
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I have a bankruptcy question

Customer Question

I have a bankruptcy question
Submitted: 1 year ago.
Category: Bankruptcy Law
Expert:  FiveStarLaw replied 1 year ago.
*This chat is not intended as legal advice. It is general information that may or may not apply to your situation and should not be relied upon.*

Hello,

Thank you for your question. I am a New York licensed attorney. My name is XXXXX XXXXX I will do whatever I can to answer your questions!

Please post your question
Customer: replied 1 year ago.

I am currently in Chapter 13 in NYS. I am having no problems with my file. My question is-My ESOP has been partially rolled over to an IRA retirement act. There is a real family emergency and I need to take a sum of money out of my account to help my son. Besides the tax implications (I am currently 61 years old) which I will pay when my taxes are due, will taking this money out of my IRA jepordize my Chapter 13 status which I do not want to do. The balance of my ESOP should be rolled over into my IRA this year. Am I ok to take my money out of my IRA and give to my son?

Expert:  FiveStarLaw replied 1 year ago.

Typically you should obtain bankruptcy court approval to withdraw the funds and gift those funds to your son. Here is why – when you withdraw the funds they lose their exempt status. Once the funds lose their exempt status the trustee can claim the funds for the benefit of creditors in addition to the payments under the plan. In an emergency situation – while the funds are still exempt – the court may approve the transfer

I would be glad to respond to any follow-up questions that you may have.
FiveStarLaw, Attorney
Category: Bankruptcy Law
Satisfied Customers: 36561
Experience: Bankruptcy Lawyer. Experienced.
FiveStarLaw and 2 other Bankruptcy Law Specialists are ready to help you
Expert:  FiveStarLaw replied 1 year ago.

Thank you very much for the "excellent service" rating and the bonus!

If I can be of assistance in the future, begin your question with: "For FiveStarLaw"
Customer: replied 1 year ago.

I appreciate your fast response, however your answer has prompted a 2nd part to my question. In January of this year I took $3000 out of my IRA for a quick loan because my brother had just passed away. I repayed the money within the 60 day window. Am I ok with this or is the $3000 now going to be taken by the court.


 


Thank you for your help with this matter.

Expert:  FiveStarLaw replied 1 year ago.

It will depend upon how strictly the judge interprets the rules. Once the money was withdrawn, it typically would have lost its exempt status. However since you immediately replaced the funds, you can argue - if it comes up- that the money did not lose its exempt status
Customer: replied 1 year ago.


Thank you again for your answer. Do you think, in your opinion, that my chances are good that there may be no action by the court because I did replace the funds, and if the court did want the funds would it just want the $3000 that I withdrew and then replaced?


 


This will be my last question, I am sorry I have had extended questions.


 


 

Expert:  FiveStarLaw replied 1 year ago.

Only the $3000 would be claimed by the court – However I do not know what the chances are that the $3000 would be claimed since I am not familiar with your Judge or Trustee.
Customer: replied 1 year ago.

Many thanks for all your help. I will not take any more money for any circumstance without 1st discussing this with my attorney---who is on a much needed vacation at this time.


 


Many thanks again,


Sam

Expert:  FiveStarLaw replied 1 year ago.
You are welcome Sam. I wish you the best of luck

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