Legal Question in Bankruptcy in California

Can I be forced to use my 401k account to pay my debts?

I was recently laid off from my job. I have $50,000 in consumer debt. I own a home with about $20,000 in equity. My severance package gave me about 5 more months of income, including my monthly debt payments. I have enough money in my 401K plan to pay off my debts, but that would leave me with nothing. There is no one I can borrow from. I am receiving $920 a month in unemployment and have $4,000 a month in expenses. If I file bankruptcy, can my house be taken from me and can my 401k money by taken to pay off my debt?


Asked on 4/20/98, 9:51 pm

1 Answer from Attorneys
Mark Markus Law Office of Mark J. Markus

Can I Be Forced to use my 401k...REPLY

The answer to your question depends on numerous factors, including how much is in your 401k plan, how old you are, and what other assets you have. Your house will not be a problem to keep in all likelihood. If you would like a more comprehensive consultation, please visit my website (address below) and give me a call. I will be happy to help.

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Answered on 5/09/98, 7:16 pm


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