401 k Loan - Possible?

[robj]

About a year after my chapter 13 case was confirmed, through some adjustments to our lifestyle, I was able to start a 401k at work, albeit a small percentage. I now find myself needing a car as our beater finally died and I was wondering if it was ok to borrow some of my own money for a while. I know borrowing against these is totally stupid but I also need a vehicle.

Questions: Are 401k loans reportable loans through equifax etc?
As this plan was started after my 13 confirmation would the loan have to be approved?
Is it worth the risk getting it?

Regards RObj

[DisneyGirl]

We had to take out a 401K loan after our chapter 7. We had no problems getting the loan. It does not report on your credit report (I've seen all three of ours). Good luck!

[SinkingFast]

I would suggest you contact your attny about this.

In Ch 13, you're only allowed to incur new debt to purchase a home and/or car. AND the Trustee has to approve of it first.

Even tho you're essentially borrowing money from yourself, it's a new debt none the less.

Best to be safe rather than sorry. Give a shout out to your attny first.

[13inOR]

Technically, you arent supposed to even contribute to a 401k while in chapter 13... I had to discontinue mine while we were in ours. This in itself
could be a problem.

[katze]

We were also told by our attorney to stop contributing to our 401k plan. If you have to give the Trustee a copy of your tax returns like we do then the money that you are contributing will show up on your W2 form. I would contact your attorney and run this by him.

[arf75]

I have a question. I filed for bankruptcy back in April under Chapter 7 had my 341 meeting in July. I am almost thru with paying off a 401k loan. Can I borrow from my 401k again before discharge? I might be moving and I will need the money for deposit.

[lrprn]

I have a question. I filed for bankruptcy back in April under Chapter 7 had my 341 meeting in July. I am almost thru with paying off a 401k loan. Can I borrow from my 401k again before discharge? I might be moving and I will need the money for deposit.

You must have your trustee's permission to incur new debt of any kind before your discharge.

And borrowing from your 401K creates a significant tax hit if you can't pay it back on time. Very risky, so be certain you have absolutely no other options.