Bankruptcy and IRA partial withdraw

[mixnight]

Hi there, we filed for bankruptcy on last September and we just had the Court hearing with the Trustee, we are not been discharged yet, my wife has a job and I'm currently unemployed .

We own one car that is a 2005 model (not in a good shape) and we have a loan on a second car that is a 2008 and we are going to surrender it in the next couple of weeks.

Since I'm not employed my 401k needs to be rollover into IRA and I just did that, I'm thinking that I can withdraw some money from the IRA before the bankruptcy discharge and buy a cheap car or even two cars and trade in the 2005 if possible, looks like doing this there is a penalty of 10% for taxes.

What other penalties can exist for taking the IRA withdraw or what penalties can exist from the trustee, thank you.

[Critter]

First talk to your attorney about the rollever and then distribution of IRA money as there may be restrictions to doing so with the bankruptcy.

Next all IRA distributions are taxable and if you do not have an exemption there is also a 10% penalty on it.