Q: Can a bank take funds for offset if the money was withdrawn from a 401k due to financial hardship?
I withdrew money from my 401k due to financial hardship, the institution in error sent to a closed/overdrawn account (I have proof this is their error). Can the bank legally take my money even though it was for hardship and they were previously notified of bankruptcy?
A: Possibly. It depends on the timing of how it came down.
Jonathan David Warner agrees with this answer
A: No. Not unless it happened before the bankruptcy filing or they have received relief from the stay after the filing.
Jonathan David Warner agrees with this answer
A: They wouldn't be able to take your money, anyway, given that the error was on their part. The commencement of your bankruptcy case strengthens your protections.
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