Individual that had a court ordered judgement to pay a specified monthly amount to a credit card company. Company has now placed a lien on personal checki9ng account but a portion of checking funds are from cash disbursement of a 401k still within the window of reinvestment time
2006-12-16 13:52:45 · 3 answers · asked by mortaft@sbcglobal.net 1 in Business & Finance ➔ Credit
It is common misunderstanding regarding 401 k.
You can take a cash disbursement and not face taxes, as long as you put the money into another fund within so many days. Then when you open the new fund the old one will transfer and taxes witheld into the new fund.
You have to get expert advice, a financial planner may have run across this before.
2006-12-16 15:58:02 · answer #1 · answered by Gatsby216 7 · 0⤊ 0⤋
Technically, even having the 401k funds placed into
a checking account invalidates the 401k status,
and makes it a cash disbursement.
Thus its no different than handing you the money.
My understanding of 401k is that you are never to touch
the money, or it invalidates the 401k status, and you owe all the penalities, etc.
Thats why you always direct transfer between
such tax special entities.
But as stated above, you need a lawyer on this.
2006-12-16 14:45:17 · answer #2 · answered by jeffpa 2 · 0⤊ 0⤋
A lawyer will know how to handle this; they cannot touch the 401k money and there will need to be specific rules put in place so that is set aside. Contact a lawyer.
2006-12-16 13:58:15 · answer #3 · answered by Kevin K 3 · 0⤊ 0⤋