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401K & Employee in Bankruptcy

JayhawkJayhawk 42 Posts
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We have a situation where our employee has notified us that she has filed under Ch. 7 of the Bankruptcy Code. She has been contributing to her 401K plan in each paycheck and we match it 100%. We spoke with our benefits representative from the investment company, and he thinks that legally, she can no longer contribute to her 401K while in Bankruptcy, and we would then not have to match any longer. Can someone help me with this? Thanks.
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  • marcmarc 3,126 Posts
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    Bankruptcy codes have recently gone through significant change and what might seem like common sense should not be relied upon.

    This is an area for specialists, and bankruptcy judges have significant powers to order various things depending on the type of bankruptcy filed.

    No disprespect intended to your benefits representative, but you probably need to talk to a bankruptcy lawyer for guidance.


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