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Roger, Attorney
Category: Bankruptcy Law
Satisfied Customers: 31733
Experience:  BV Rated by Martindale-Hubbell; SuperLawyer rating by Thompson-Reuters
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I am in process of applying to my bank to allow for short sale

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I am in process of applying to my bank to allow for short sale of my property. I was filling out the required paperwork including the Uniform Borrower Assistance Form (MAC form 710). I spoke with the rep from the bank and was told that I had to include my retirement and 401k assets in the Asset Column of the form. The form clearly states NOT to include retirement assets. The rep said they still required it.

Additionally, I receive a $10,000 lump sum payment annually as a military pension called Voluntary Service Incentive. I do not get anything monthly and I get it every October.

1. Can the bank legally require my retirement account information?
2. Since I do not receive my military pension monthly, and I do not have the annual money at this time, am I obligated to list it under the column labled "Monthly Household income"?
3. The bank has also requested my checking account information and balances. I have $10k in my checking account which is earmarked for a settlement of a credit card debt I negotiated with another bank but have not yet paid. Should I still list that money as an asset?

Hi - my name is XXXXX XXXXX I'm a Bankruptcy litigation attorney. Thanks for your question.

1. You're not entitled to a short sale - - it's a privilege, not a legal right, to get one done. I say that to put this into perspective --> the bank makes the rules, and they can request just about anything within reason, which would include any financial documentation you have. Thus, the bank can require this of you, BUT you don't have to provide it - - HOWEVER, if you don't, the bank will likely refuse the short sale application.

2. You would likely need to divide your military pension by 12 (months) and add that amount to your monthly income.

3. Yes, if the money is in your checking account (even though it is spoken for), you would have to include it in your balance. You can explain what the money is for, but you would still need to disclose it.

Customer: replied 4 years ago.

let me be more specific for question #1. Can the bank seize any of my retirement funds or expect me to withdraw from it to pay my mortgage?

No. Your retirement funds are exempt from creditors under ERISA. No judgment creditor, creditor, or even bankruptcy can attach these funds.
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Hi - thanks for allowing me to assist you. If the need arises, I'll be glad to answer any additional questions you have regarding this or any other issue. Just let me know.