Kansas City, MO asked in Bankruptcy for Missouri

Q: If I need to borrow from 401k and completed chp13 pymts and received discharge of debtor letter from court would I be ok

Finished my chapter 13 payment plan, received letter about this from trustee, trustee filed the completion with the fed court, I received discharge of debtor letter from the federal judge.

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1 Lawyer Answer
David Reese Fondren
David Reese Fondren
Answered
  • Bankruptcy Lawyer
  • St. Charles, MO
  • Licensed in Missouri

A: If you already received your discharge and are out of the plan, you can resume borrowing money and getting back into debt like you were before and start the whole mess all over again. 401k loans have to be paid back and cannot be discharged in a bankruptcy. If you default you end up with a tax liability and huge penalty. Even if you pay yourself back, your money is not in the fund to grow. Only do this as a last resort.

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