My question involves bankruptcy in the state of: Illinois. I recently got caught in the housing market mess in FL & home is in foreclosure there. Home values plunged there about $200,000 in a year. I moved back to my home state of IL. I have sought work for 1-1/2 years. I have borrowed funds from relatives for moving & living expenses. When I went to apply for food stamps in March, I was told I could accesss 401K funds, which I didn't know. I got about $20,000.00 after taxes. I repaid amounts borrowed from my sister, mother & brother. Later (in July), at the suggestion of a friend, I filed a Chapter 7 bankruptcy in IL. The bankruptcy trustee is trying to make my relatives repay these funds (total of about $5,000). The trustee is also threatening to make me repay the remainder of the funds into the court but I have very little of the funds remaining as I have been living on them.
I am confused as my atty. had told me the 401K funds would be based on the more liberal Fed. bankruptcy laws & would be exempt. Also, I am not sure if the trustee can garnish future wages or future tax refunds. Thank you for any assistance.