| Can a 401K plan be seized to satisfy a judgment? |
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tony1853
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| Can a 401K plan be seized to satisfy a judgment? |
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Hello all. Looking for some insight on this issue:
I had a small business fail in Nov. of last year, and there remains a few unpaid vendors. One is suing me (even though I didn't sign a personal guarantee, they are naming me and the corp. in the complaint). I don't believe they will be successful since I didn't personally guarantee anything, but I got me to thinking...
I just started a great new job with a phenomenal 401K plan (they match 50%, with NO limit), and I want to enroll and start deferring...but if somebody were to obtain a judgement against me, is it possible that the balance of the 401K could be seized, or have a lein placed against it??
Thanks a lot for your opinions!
T
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Sun Jul 31, 2005 3:09 am |
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David Briggs
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If there is any state (no doubt, a so-called red state) which previously allowed attachment of a 401k to satisfy a money judgment, that probably ended with the recent SCOTUS decision concerning treatment of IRAs as an asset in bankruptcy:
http://www.usatoday.com/money/perfi/retirement/2005-04-04-ira-safe_x.htm
~~David
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Sun Jul 31, 2005 5:27 am |
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Rolo
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My unqualified _guess_ is that I would think so. Whether someone actually persues it, however, is another matter.
What type of business was it? sole-proprietor, LLC?
"Expect me when you see me."
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Sun Jul 31, 2005 5:28 am |
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gad11
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Not sure how it would relate to your current situation but all Tax-Exempt accounts(401k,403b,IRA, etc.) are now protected from creditors under the Bankruptcy Reform Act. Assets in 401k,457,403b that are covered by ERISA have been protected from creditors since 1992. Check with a lawyer in your specific state.
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Sun Jul 31, 2005 8:28 pm |
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efflandt
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A quick search found this which is also likely listed elsewhere http://www.seacoastonline.com/news/hampton/07152005/business/52990.htm
However, that may not stop someone from possibly garnishing your wages or seizing other assets (bank accounts, etc.) if they get a judgement against you.
Was anyone other than yourself involved in the business, and how was it set up that makes you think creditors will just forget the money owed to them (did the business file bankruptcy)?
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Sun Jul 31, 2005 9:51 pm |
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