Chapter 7 Question
Yesterday, my husband and I signed our petition for Ch. 7 bankruptcy at our attorneys office. Our attorney initially said that we qualified for chapter 7 and we paid him in full. I had listed in our initial paperwork that my husband and I had done 2 withdrawals from his 401k in the last 6 months in order to try to stay afloat. (Learning this was a VERY stupid decision but alas here we are). What got us in this situation was my husband got laid off from his job making around 120k a year unexpectedly and then started a new job making 45k. We got very behind on bills leading us to bankruptcy. Each 401k withdrawal we received around 8k net which we used to catch up on rent, credit cards, car payments, etc. Fast forward to our signing and the attorney said that he accidentally left out the 401k withdrawals and so it put us over the means test because the 401k withdrawals increases our 6 month look back. The attorney said that we could go ahead and file with the presumption of abuse and then he could explain that the 401k withdrawals were one-time events that should not be included in our normal income which would put us under the means test. He feels that this will likely not be an issue but worse case scenario it would go to a judge and then if that didn't go well we could be forced out of bankruptcy or into a chapter 13. Just nervous about this whole process and wondering if anyone has experienced anything similar and what the outcome was? I'm trying to trust the process and trust the attorney but it's unsettling to not know how it will play out in the long run.