A Home at Risk -- Saved
The debtor, hounded by creditors, wanted the quick fix of Chapter 7 bankruptcy, even if it meant sacrificing his home, which had $15,000 in equity, to the trustee. We reviewed his assets and realized that he had a 401K plan, an exempt asset, and in addition, his military retirement plan. Also, a look at the terms of his 401K plan showed that it provided for distributions before retirement in hardship situations. We filed the Chapter 7 and then arranged with the trustee for payment of $15,000 -- the amount of the equity in the home -- from a 401K distribution we got from the administrator (making sure to set aside enough we could pay all taxes at year's end.)
Result: The debtor got Chapter 7 relief in three months, kept his home, and protected his retirement income with his more than adequate military retirement and what was left in the 401K.