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How to protect money from 401k after cashing it?

Submitted by on Mon, 02/07/2011 - 12:43
Posts: 202330


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.

Submitted by aubrey on Tue, 02/08/2011 - 06:53


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