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Laid off: What's next for your 401(k)

Got questions about money? Gerri Willis has answers on topics from your 401(k) to getting better gas mileage.

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By Gerri Willis, CNN

For more information on managing your largest investment, check out Gerri Willis' "Home Rich," now in bookstores.

NEW YORK ( -- Gerri Willis answers reader's questions.

1. 401(k) confusion

I was recently laid off from my job with a 30-day notice period. Is it legal for an employer to stop my 401(k) contribution for the 30-day period? And is the employer obligated to match the employee's contribution during this 30-day period? - Floyd, Illinois

If you are still receiving a salary during this time, your 401(k) contribution cannot be stopped and the company must match you during this period. However, if the salary you're getting is part of a severance package, your contribution will be stopped and there will be no employer match.

That's according to the American Benefits Council. Make sure you contact your human resources representative if you want to get the specifics.

2. Short selling

In a short sale, you sell your home and ask the lender to accept less than what is owed on a home's mortgage, and forgive the remainder of the unpaid debt. On paper, it sounds great. The problem is that it takes a long time before a lender gives approval for a short sale and in the end, your lender may ask you to make up the difference anyway.

Bottom line here is that a short sale and a foreclosure look just about the same on your credit score - big ugly black marks. You're much better off trying to work out a payment schedule with your lender. You may be able to reduce your monthly payments for a while.

3. Better mileage at the pump

Does it matter at what level you refill your gas tank? There are a few rumors out there that if you fill up before your tank reaches less than a half a tank remaining, you'll get better gas mileage. Is this true? - Anonymous

According to, there may be some truth to this if you have a car that's from the mid-80s. That's because older cars may have poorly-sealing gas caps. But take heart, it doesn't really matter what level you fill your gas tank to with modern cars.

4. Responsibilities of a co-signer

I helped my brother by co-signing for his house. What is the best way to get my name removed? - Richard, California

It's not that easy your name removed. If your brother makes enough money and has a good enough credit score to qualify for a refinance you can have your name removed says John Ulzheimer of If the house has gone down in value, your brother may have to come up with cash at the closing. And, if your brother doesn't qualify for a refinance, it will be very difficult to get your name off the loan.

Remember, when you've signed on the dotted line, you've agreed to take on responsibilities. The lender doesn't want to lose that leverage. To top of page

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