TSP loan while on Chapter 13

[jimcruz]

Hi:
I've search for an answer to my question but found nothing so here's my question.

I work for the federal government in Puerto Rico, I file for bankruptcy about 15 months ago and been paying faithfully since. I owe my dad $4000 and he wants his money back, I have a tsp account and I was planing on making a tsp loan so I can pay him. I had a previous loan that was paid in full and closed last month and I know I have to wait 60 days before I can make another loan. I know this loan is not going to be reflected in my credit report since I'm borrowing money from my own money. Any advise will be greatly appreciated.

Jim

[justbroke]

Never borrow against your future. Other than that, I would try to have your father wait unless he's desperate. You may consider only borrowing half the amount ($2,000 rather than $4,000) so that your TSP payments do not affect your Chapter 13 Plan.

I do not know if you have a step payment plan that was based on your TSP loan being paid off during the life of your Chapter 13 Plan. In that case, if the Trustee intends to or your plan already reflects a step up, then the Trustee is certainly not going to entertain or allow the expense for another TSP loan.

[jimcruz]

Hi and thanks for your suggestions. My dad is already desperate, I borrowed that money more than 2 years ago. My bankruptcy plan is for 3 years paying $200 and one final payment of $400. If I can make the loand I will try to pay the same amount I was paying before so there's basically no change. Thoughts?.

[justbroke]

Hi and thanks for your suggestions. My dad is already desperate, I borrowed that money more than 2 years ago. My bankruptcy plan is for 3 years paying $200 and one final payment of $400. If I can make the loand I will try to pay the same amount I was paying before so there's basically no change. Thoughts?.

Please reread what I wrote above. You need to look at your Plan and seek advice from your attorney. If you have a step up plan, it won[t be "pay[ing] the same amount" that you were paying before. It will be 2 times the amount you were paying before.