Feldman v. People First Fed. Credit Union (In re White)

RICHARD E. FEHLING, Chief United States Bankruptcy Judge

I. INTRODUCTION

The issue I must decide in this adversary proceeding is whether Debtor's pre-petition hardship withdrawal from her 401(k) account caused the withdrawn funds to lose their protected status as exempt under 11 U.S.C. § 541(c)(2). Were the withdrawn funds not part of the bankruptcy estate and therefore not subject to the claims of the chapter 7 Trustee? Or were the withdrawn funds part of the bankruptcy estate and therefore subject to the claims of the chapter 7 Trustee? This is a core proceeding and the parties have agreed…