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Ellen, Attorney
Category: Bankruptcy Law
Satisfied Customers: 36714
Experience:  Bankruptcy Lawyer. Experienced.
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Once you file bankruptcy or before you file bankruptcy how

Resolved Question:

Once you file bankruptcy or before you file bankruptcy how long before you can recieve monies before the court takes it to spread it among the creditors. I am going thru a divorce and will need to file bankruptcy, I will receive 1/2 of his 401K and I'm concerned they could take it to pay the creditors.
Submitted: 6 years ago.
Category: Bankruptcy Law
Expert:  Ellen replied 6 years ago.

So sorry to hear of your difficult situation.

I am a lawyer with 25 years experience. While I am not your lawyer and do not represent you, I will endeavor to provide you with legal information through this open and nonconfidential forum.

A 401(k) is exempt from the claims of creditors. Provided you do not liquidate the 401(k), it would not be included in your bankruptcy estate
Customer: replied 6 years ago.
What do you mean by liquidate?
Expert:  Ellen replied 6 years ago.
By liquidate I meant change the form from a 401(k) to a regular bank account
Customer: replied 6 years ago.
I would be putting it into a bank account or savings account because I am on Disability and not able to work. So if I liquidate it how many months do I have to wait either before or after the bankruptcy before we liquidate the 401k.
Expert:  Ellen replied 6 years ago.
You can liquidate the 401(k) at any time after your bankruptcy is discharged/closed. If you liquidate the 401(k) prior to the bankruptcy, any remaining funds will be lost to the bankruptcy court
Customer: replied 6 years ago.
What if I spend the 401K before filing Bankruptcy, I can't file until July and we are holding off until we file bankruptcy. I'd rather file for the divorce now.
Expert:  Ellen replied 6 years ago.
If you have spent the 401(k) prior to filing bankruptcy, it would not be an asset on the bankruptcy petition
Customer: replied 6 years ago.
Can my disability, alimony, or child support be taken to pay creditors?
Expert:  Ellen replied 6 years ago.

J.A. policy requires that you start a new thread for a new question. Please accept the answer and then you may start your new question in a new thread
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