01 Aug '16

Hardship Withdrawals

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Posted by badgeradmin

Are hardship withdrawals from IRAs or retirement plans “income” for purposes of a bankruptcy statement of income (or means test)?

No, such withdrawals made in the past 6 months do not generally count toward your income for that period.

However, during the course of the bankruptcy, you may have to provide your Bankruptcy Trustee with some details about how this withdrawal was spent, especially if it is a larger amount. Badger Bankruptcy LLC will help you itemize these records for the Trustee.