Can I continue contributing to my employer's 401k savings plan if I file for either Chapter 7 or Chapter 13 bankruptcy? 19 Answers as of July 08, 2014

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Law Offices of Daniel J Winter
Law Offices of Daniel J Winter | Daniel J Winter
Yes, but you need to consult with an experienced bankruptcy attorney, because the contributions have certain effects on the "Means Test" to determine what kind of bankruptcy you might qualify for. Call a lawyer and set up a free consultation now.
Answer Applies to: Illinois
Replied: 7/8/2014
Arany & Associates
Arany & Associates | Lawrence C. Arany
You may continue your contributions without complication in a chapter 13. In a chapter 7, however, you aren't allowed to claim a deduction for that purpose.
Answer Applies to: Indiana
Replied: 7/7/2014
Janet A. Lawson Bankruptcy Attorney
Janet A. Lawson Bankruptcy Attorney | Janet Lawson
In some jurisdictions they will fight you on that. Consult local counsel.
Answer Applies to: California
Replied: 7/4/2014
Tokarska Law Center
Tokarska Law Center | Kathryn U. Tokarska
I don't know what district in California you are in but in Southern the Trustee & Court's position is that voluntary payments to retirement accounts are a form of savings account and they aren't a deduction on the Means Test. Whether you can continue to put money away in retirement account depends on more specific facts about your financial situation and the amount of the contributions. The best bet to ensure success in your case is to retain an experienced attorney who handles bankruptcies exclusively as they are likely to be the most knowledgeable in this area of the law and can identify any potential issues in your case.
Answer Applies to: California
Replied: 7/2/2014
EDWARD P RUSSELL | EDWARD P RUSSELL
Yes in either chapter.
Answer Applies to: Minnesota
Replied: 7/2/2014
    GARCIA & GONZALES, P.C.
    GARCIA & GONZALES, P.C. | Richard N. Gonzales
    It is permitted in both Chapter 7's and 13's. In a Chapter 13, you can not increase the amount of the contribution while you are in the Chapter 13.
    Answer Applies to: Colorado
    Replied: 7/2/2014
    The Law Office of Darren Aronow, PC
    The Law Office of Darren Aronow, PC | Darren Aronow
    Yes, but a voluntary contribution is not an expense so will remain as part of your income.
    Answer Applies to: New York
    Replied: 7/2/2014
    Ronald K. Nims LLC | Ronald K. Nims
    A Chapter 7 won't affect your contributions to a 401(k). In Chapter 13, you'll be required to stop 401(k) contributions because they are voluntary savings not expenses.
    Answer Applies to: Ohio
    Replied: 7/2/2014
    Patrick W. Currin, Attorney at Law | Patrick Currin
    Yes. But typically only in the amounts you had previously done.
    Answer Applies to: California
    Replied: 7/2/2014
    A Fresh Start
    A Fresh Start | Dorothy G Bunce
    Chapter 7, sure, as long as you didn't make a change to increasing your contributions in the months before filing bankruptcy. As to Chapter 13, you can continue to contribute, but your bankruptcy trustee will want the money that you are contributing to go to paying your creditors. So if you are contributing $200/month toward retirement, and your budget shows you have $300/month available to pay debts, your trustee will want $500/month in plan payments. If you prefer to cut your cable, reduce your cell phone use and start eating beans and rice to make the higher payment, it will be your choice.
    Answer Applies to: Nevada
    Replied: 7/2/2014
    Law Office of Michael Johnson
    Law Office of Michael Johnson | Michael Johnson
    Yes as long as you have done prior.
    Answer Applies to: Florida
    Replied: 7/2/2014
    The Orantes Law Firm
    The Orantes Law Firm | Giovanni Orantes
    If you file for Chapter 7 protection, you may continue to contribute to the 401k savings plan. The 401k contribution is only relevant as it relates to whether you qualify to file for protection under Chapter 7. Once you have made that determination, you can continue to contribute to it as you wish or may be obligated to contribute based on your employer's requirements. As for Chapter 13, recent case law calls into question whether you may continue to do so, but at the least you should be able to finish contributing for the remainder of the year.
    Answer Applies to: California
    Replied: 7/2/2014
    Deborah F Bowinski, Attorney & Counselor at Law | Debby Bowinski
    Probably, within reason. That is something that may depend upon the amounts involved and the rest of the income and expense situation. You should really consult with a bankruptcy lawyer in order to be sure you are able to protect as much as possible in your bankruptcy filing.
    Answer Applies to: Colorado
    Replied: 7/2/2014
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