Legal Question in Bankruptcy in Washington

What's the best way to protect my TSP (ex husbands government civil service elected 401K plan) I will be awarded as property settlement in my divorce from bankruptcy? I wanted to take it as a cash out as I'm unemployed right now & can use it plus if i cash it as divorce settlement would be exempt from extra 10% penalty. Would it best to file my bankruptcy before finalization of divorce or wait until QDRO (or similar as its not required w/ TSP) has been ordered. (Also reason I must file bankruptcy is due to ex filing already & losing house (that had equity thou) to foreclosure and a joint car was repo'd... along w/ now falling behind on CC due to unemployment.


Asked on 11/26/12, 1:34 pm

1 Answer from Attorneys
Christopher Steuart IT Forensics, Inc.

Once money is out of the retirement account it is vulnerable to process and is a non-exempt asset (i.e. subject to claims of creditors). I'd recommend keeping it in the account until the bankruptcy is completed (as retirement account assets are generally protected from bankruptcy).

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Answered on 11/30/12, 10:28 pm


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