The bankruptcy court can’t touch your 401k money. So, why would he have withdrawn money from his fully exempt 401K immediately prior to filing and put himself in this position? Assuming he cannot now exempt it, I’d spend it down slowly for basic living expenses, that could be well documented, and then file in a few months. Trustees here will question it. However, there is case law that says that the money maintains its ERISA protection. Silly to have to go through this though, client should leave money where it is until his Dallas bankruptcy lawyers get his case finished and filed.

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