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cfortunato
cfortunato, Attorney
Category: Bankruptcy Law
Satisfied Customers: 8023
Experience:  Bankruptcy professor.
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Filed personal bankruptcy in Virginia due business debts.

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Filed personal bankruptcy in Virginia due business debts. Personal Debts were discharged in May 2013. Chapter 7 Business bankruptcy is pending. We have moved to Florida and would like to use our 401(k) funds as downpayment due to high risk credit after bankruptcy. Husband and I both are over 62. Can we use the 401(k) funds as downpayment for a home in Florida without risk of business creditors claiming the funds? Virginia Bankruptcy attorney said the 401(k) funds were protected for the bankruptcy filing. However, if we remove the funds for a downpayment on a Florida home is the money still protected? The 401(k) funds are our only source of downpayment funds. We are purchasing a smaller home in Florida bu need to make a larger down payment to get a good rate for the home due to bankruptcy filing. The business was mine and not my spouse.

cfortunato :

 


Hi - my name is XXXXX XXXXX I'm a Bankruptcy and Consumer Protection attorney here to assist you.

cfortunato :

Were you personally liable for your business debts? If yes, were those business debts included in your personal Bankruptcy, so that your personal liability for those debts was discharged in your Bankruptcy?

Customer:

Yes, loans had a personal guarantee. All personal and business loans ( with or without a personal gurantee) were listed on the personal bankrutcy. I did not have much personal debt. We sold our home and turned over the proceeds to help to pay business debts. All debts were discharged.

cfortunato :

Thank you for your response.

cfortunato :

Since your personal liability for your business debt was dischared in your Bankruptcy, your business creditors cannot take any personal assets from you.

cfortunato :

This includes real estate.

Customer:

Thank-you very much. This has been a nightmare for us. We were in business for 19 years. Our customers did not pay us so we could not pay our business loan.

cfortunato :

You're welcome! And I do understand your frustration, as I was in a similar predicament around 15 years ago.

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