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401k Plan Loan following repayment of pre-existing loan

Posted: Thu Aug 13, 2015 3:46 pm
by Yahoo Bot

The 401(k) is not an asset of the Chapter 13 estate, Regardless a new
401(k) loan will effect the debtor's budget with the higher repayment amount
being deducted from the paycheck, so Court approval is required.
Additionally, the current 401(k) loan the debtor wants to pay off in order to take
out the higher loan amount is almost always a five year term. Thus if thedebtor's Chapter 13 plan term is 5 years, the loan was likely scheduled to be
otherwise paid off prior to the plan completion which would result in
additional disposable income available to pay into the plan for the remainder of
the plan term. Accordingly a motion to modify the plan may also be
necessary.
Mark T. Jessee
Law Offices of Mark T. Jessee
"A Debt Relief Agency"
50 W. Hillcrest Drive, Suite 200
Thousand Oaks, CA 91360
(805) 497-5868 (805) 497-5864 (Facsimile)
NOTICE TO RECIPIENT: THIS E-MAIL IS MEANT FOR ONLY THE INTENDED RECIPIENTOF THE TRANSMISSION, AND THIS COMMUNICATION IS INTENDED TO BE PRIVILEGED BY
LAW. IF YOU RECEIVED THIS E-MAIL IN ERROR, ANY REVIEW, USE, DISSEMINATION,DISTRIBUTION, OR COPYING OF THIS E-MAIL IS STRICTLY PROHIBITED. PLEASE
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In a message dated 8/13/2015 1:18:31 P.M. Pacific Daylight Time,
cdcbaa@yahoogroups.com writes:
My clients have had a 401k loan they've paying off since the
petition-filing and confirmation of their plan back in 2012. They still owe over $10,000
and would like to borrow double what they owe after first paying back the$10,000. Characterizing this as a loan makes this sound as proscribed bythe standard Ch. 13 confirmation order that prohibits incurring credit ofmore than $500 without Court authorization. However, I recall that some
cases say this is not truly a loan on the basis that it is the Debtor's own
money because they can only borrow up to half of the amount they have actually
contributed already, anyway. The plan pays around 20% to unsecured
claims. I would suspect some attorney among the membership may have actual
experience with this. Does anybody think it would violate the Court's order to
do this transaction without requesting an order to approve it?
Giovanni Orantes, Esq.*
Orantes Law Firm, P.C.
3435 Wilshire Blvd. Suite 2920
Los Angeles, CA 90010
Tel: (213) 389-4362
Fax: (877) 789-5776
e-mail: _go@gobklaw.com_ (mailto:go@gobklaw.com)
website: _www.gobklaw.com_ (http://www.gobklaw.com/)
*Certified Bankruptcy Specialist, State Bar of California, Board of Legal Specialization
*Board Certified - Business Bankruptcy Law - American Board of
Certification
*Board Certified - Consumer Bankruptcy Law - American Board of
Certification
Commercial Litigation
Estate Planning
Outside General Counsel
WE ARE A "DEBT RELIEF AGENCY" AS DEFINED BY FEDERAL LAW.
SERVING BAKERSFIELD, LOS ANGELES, ORANGE COUNTY, RIVERSIDE, SAN BERNARDINOAND SANTA BARBARA AND THE WORLD FOR CHAPTER 11 AND 15 CASES.
The 401(k) is not an asset of the Chapter 13 estate,
Regardless a new 401(k) loan will effect the debtor's budget with thehigher repayment amount being deducted from the paycheck, so Court approval is
required. Additionally, the current 401(k) loan the debtor wants to pay
off in order to take out the higher loan amount is almost always a five
year term. Thus if the debtor's Chapter 13 plan term is 5 years, the
loan was likely scheduled to be otherwise paid off prior to the
plan completion which would result in additional disposableincome available to pay into the plan for the remainder of the plan
term. Accordingly a motion to modify the plan may also be
necessary.


Mark T.
JesseeLaw Offices of Mark T. Jessee"A Debt Relief Agency"50 W.Hillcrest Drive, Suite 200Thousand Oaks, CA 91360(805) 497-5868 (805)
497-5864 (Facsimile)NOTICE TO RECIPIENT: THIS E-MAIL IS MEANT FOR ONLY
THE INTENDED RECIPIENT OF THE TRANSMISSION, AND THIS COMMUNICATION IS INTENDED
TO BE PRIVILEGED BY LAW. IF YOU RECEIVED THIS E-MAIL IN ERROR, ANY REVIEW, USE,
DISSEMINATION, DISTRIBUTION, OR COPYING OF THIS E-MAIL IS STRICTLY PROHIBITED.
PLEASE NOTIFY US IMMEDIATELY OF THE ERROR BY RETURN E-MAIL AND PLEASE DELETE
THIS MESSAGE FROM YOUR SYSTEM. THANK YOU IN ADVANCE FOR YOUR COOPERATION

In a message dated 8/13/2015 1:18:31 P.M. Pacific Daylight Time,
cdcbaa@yahoogroups.com writes:



My clients have had a 401k loan they've paying off since the
petition-filing and confirmation of their plan back in 2012. They still owe
over $10,000 and would like to borrow double what they owe after first paying
back the $10,000. Characterizing this as a loan makes this sound as proscribed by the standard Ch. 13 confirmation order that prohibits incurring
credit of more than $500 without Court authorization. However, I recall
that some cases say this is not truly a loan on the basis that it is the Debtor's own money because they can only borrow up to half of the amount they
have actually contributed already, anyway. The plan pays around 20% to
unsecured claims. I would suspect some attorney among the membership may
have actual experience with this. Does anybody think it would violate
the Court's order to do this transaction without requesting an order to
approve it?
--










Giovanni Orantes, Esq.*
Orantes Law Firm, P.C.3435 Wilshire Blvd. Suite 2920Los Angeles,
CA 90010Tel: (213) 389-4362Fax: (877) 789-5776e-mail: go@gobklaw.comwebsite: www.gobklaw.com
*Certified
Bankruptcy Specialist, State Bar of California, Board of Legal
Specialization
*Board Certified - Business Bankruptcy Law - American Board of
Certification
*Board Certified - Consumer Bankruptcy Law - American Board of
Certification
Commercial Litigation
Estate Planning
Outside General Counsel


The post was migrated from Yahoo.

401k Plan Loan following repayment of pre-existing loan

Posted: Thu Aug 13, 2015 3:35 pm
by Yahoo Bot

You know I do not practice in Chapter 13 land but I can't keep my mouth
shut.
This is a loan. You need permission to incur the debt.
I would caution against characterizing this as anything other than a loan
because then, maybe it is the Debtor's money and it is not a retirement
account after all. Maybe the entire amount should have been included in the
liquidation analysis.
Sincerely,
*Michael Avanesian, Esq. *
Simon Resnik Hayes, LLP
15233 Ventura Blvd., Suite 250
Sherman Oaks, CA 91403
Tel: 818.783.6251 | Cel: 818.817.1725
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On Thu, Aug 13, 2015 at 1:29 PM, Giovanni Orantes go@gobklaw.com [cdcbaa] wrote:
>
>
> No. They already have the $10K; they just want to have $20K instead.
>
>
>
> --
> Giovanni Orantes, Esq.*
> Orantes Law Firm, P.C.
> 3435 Wilshire Blvd. Suite 2920
> Los Angeles, CA 90010
> Tel: (213) 389-4362
> Fax: (877) 789-5776
> e-mail: go@gobklaw.com
> website: www.gobklaw.com
>
> **Certified Bankruptcy Specialist, State Bar of California, Board of Legal
> Specialization*
> *Board Certified - Business Bankruptcy Law - American Board of
> Certification
> *Board Certified - Consumer Bankruptcy Law - American Board of
> Certification
> Commercial Litigation
> Estate Planning
> Outside General Counsel
>
>
>
> WE ARE A "DEBT RELIEF AGENCY" AS DEFINED BY FEDERAL LAW.
>
> SERVING BAKERSFIELD, LOS ANGELES, ORANGE COUNTY, RIVERSIDE, SAN BERNARDINO
> AND SANTA BARBARA AND THE WORLD FOR CHAPTER 11 AND 15 CASES.
>
>
>
You know I do not practice in Chapter 13 land but I can't keep my mouth shut.This is a loan. You need permission to incur the debt.I would caution against characterizing this as anything other than a loan because then, maybe it is the Debtor's money and it is not a retirement account after all. Maybe the entire amount should have been included in the liquidation analysis.Sincerely,Michael Avanesian, Esq.Simon Resnik Hayes, LLP15233 Ventura Blvd., Suite 250Sherman Oaks, CA 91403Tel: 818.783.6251 | Cel: 818.817.1725
The post was migrated from Yahoo.

401k Plan Loan following repayment of pre-existing loan

Posted: Thu Aug 13, 2015 1:29 pm
by Yahoo Bot

No. They already have the $10K; they just want to have $20K instead.
Giovanni Orantes, Esq.*
Orantes Law Firm, P.C.
3435 Wilshire Blvd. Suite 2920
Los Angeles, CA 90010
Tel: (213) 389-4362
Fax: (877) 789-5776
e-mail: go@gobklaw.com
website: www.gobklaw.com
**Certified Bankruptcy Specialist, State Bar of California, Board of Legal
Specialization*
*Board Certified - Business Bankruptcy Law - American Board of Certification
*Board Certified - Consumer Bankruptcy Law - American Board of Certification
Commercial Litigation
Estate Planning
Outside General Counsel
WE ARE A "DEBT RELIEF AGENCY" AS DEFINED BY FEDERAL LAW.
SERVING BAKERSFIELD, LOS ANGELES, ORANGE COUNTY, RIVERSIDE, SAN BERNARDINO
AND SANTA BARBARA AND THE WORLD FOR CHAPTER 11 AND 15 CASES.
No. They already have the $10K; they just want to have $20K instead.-- Giovanni Orantes, Esq.*Orantes Law Firm, P.C.3435 Wilshire Blvd. Suite 2920Los Angeles, CA 90010Tel: (213) 389-4362Fax: (877) 789-5776e-mail: go@gobklaw.comwebsite: www.gobklaw.com
The post was migrated from Yahoo.

401k Plan Loan following repayment of pre-existing loan

Posted: Thu Aug 13, 2015 1:26 pm
by Yahoo Bot


The post was migrated from Yahoo.

401k Plan Loan following repayment of pre-existing loan

Posted: Thu Aug 13, 2015 1:18 pm
by Yahoo Bot

My clients have had a 401k loan they've paying off since the
petition-filing and confirmation of their plan back in 2012. They still owe
over $10,000 and would like to borrow double what they owe after first
paying back the $10,000. Characterizing this as a loan makes this sound as
proscribed by the standard Ch. 13 confirmation order that prohibits
incurring credit of more than $500 without Court authorization. However, I
recall that some cases say this is not truly a loan on the basis that it is
the Debtor's own money because they can only borrow up to half of the
amount they have actually contributed already, anyway. The plan pays
around 20% to unsecured claims. I would suspect some attorney among the
membership may have actual experience with this. Does anybody think it
would violate the Court's order to do this transaction without requesting
an order to approve it?
Giovanni Orantes, Esq.*
Orantes Law Firm, P.C.
3435 Wilshire Blvd. Suite 2920
Los Angeles, CA 90010
Tel: (213) 389-4362
Fax: (877) 789-5776
e-mail: go@gobklaw.com
website: www.gobklaw.com
**Certified Bankruptcy Specialist, State Bar of California, Board of Legal
Specialization*
*Board Certified - Business Bankruptcy Law - American Board of Certification
*Board Certified - Consumer Bankruptcy Law - American Board of Certification
Commercial Litigation
Estate Planning
Outside General Counsel
WE ARE A "DEBT RELIEF AGENCY" AS DEFINED BY FEDERAL LAW.
SERVING BAKERSFIELD, LOS ANGELES, ORANGE COUNTY, RIVERSIDE, SAN BERNARDINO
AND SANTA BARBARA AND THE WORLD FOR CHAPTER 11 AND 15 CASES.
My clients have had a 401k loan they've paying off since the petition-filing and confirmation of their plan back in 2012. They still owe over $10,000 and would like to borrow double what they owe after first paying back the $10,000. Characterizing this as a loan makes this sound as proscribed by the standard Ch. 13 confirmation order that prohibits incurring credit of more than $500 without Court authorization. However, I recall that some cases say this is not truly a loan on the basis that it is the Debtor's own money because they can only borrow up to half of the amount they have actually contributed already, anyway. The plan pays around 20% to unsecured claims. I would suspect some attorney among the membership may have actual experience with this. Does anybody think it would violate the Court's order to do this transaction without requesting an order to approve it?-- Giovanni Orantes, Esq.*Orantes Law Firm, P.C.3435 Wilshire Blvd. Suite 2920Los Angeles, CA 90010Tel: (213) 389-4362Fax: (877) 789-5776e-mail: go@gobklaw.comwebsite: www.gobklaw.com*Certified Bankruptcy Specialist, State Bar of California, Board of Legal Specialization*Board Certified - Business Bankruptcy Law - American Board of Certification*Board Certified - Consumer Bankruptcy Law - American Board of CertificationCommercial LitigationEstate PlanningOutside General Counsel
The post was migrated from Yahoo.