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How to protect money from 401k after cashing it?

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Hello

I am at a point where I absolutely have to take the small amount of money I have in my 401k. Its a last resort.

My question is, if I withdraw the money, and my 401k company deposits the money into my bank account, should I be worried that creditors will find out I have that money and sue me or levy my bank account? Can they just take it immediately?
(I have about 7 credit cards that have been charged off more than a year ago, the highest amount is about 2 thousand, the rest are $800 or less).

I am between jobs at this time, and I will only be getting between 2K-3K.

Thank You for you time.




First of all, 20% will be withheld right off the top. When you file your taxes for 2011 there will be an additional 10% penalty if you are under 59-1/2.

Does your 401k allow you to take a loan? Mine did and that's how I paid my credit card settlements along with saving up some money.

If you find you must wipe out your 401k, then have them send you a check; don't have it wired to your account.

Sub: #1 posted on Tue, 02/08/2011 - 06:53

aubrey aubrey
Moderators Cum Industry Expert
(Posts: 1204 | Credits: )

Thanks for responding.

I know about the penalty fees, but right now its a necessity. I am in my early 20s so I plan to start a retirement savings again once I have paid for school and my taxes.

Thanks again.

Sub: #2 posted on Tue, 02/08/2011 - 10:18

Unregistered


one more question:
Will creditors know I took my 401k money?

Thanks

Sub: #3 posted on Tue, 02/08/2011 - 10:24

Unregistered


No, they won't. Ten years ago I was in the same boat and cashed out $11,000 in rollover money. Do what ya gotta do to survive.

Sub: #4 posted on Tue, 02/08/2011 - 10:58

aubrey aubrey
Moderators Cum Industry Expert
(Posts: 1204 | Credits: )

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