Borrow from retirement?

[dmc-2008]

Its ok to borrow from retirement even if you are not in 100% payback right?

i have such an acct and I would be borrowing from myself. They dont look at credit score. Its a small loan to me, from me.

this is ok to do? I can really use it to help me get my kid into college and help me make it to October!

[dmc-2008]

Lady in Red do you know? I read about this in another thread here,I cant find it!😔

[justbroke]

LadyInTheRed someone wants to see if you can answer their question!

Generally it's okay to take a loan from a 401(k) because you are in fact just borrowing exempt money and paying it back. The sad fact is that have to pay it back and deal with whether the payment itself (not the loan) could put your Chapter 13 plan payments or your budget in jeopardy. It reads as though you want to take a significant loan (as you refer to making it through October 2017).

I really have no other guidance for you. It's a tough choice.

[dmc-2008]

Thank you JB! Yeah its hard to borrow anything because it so goes against my grain, even if just borrowing from myself. But I just need to know if its legal or if it could put my BK in jeopardy with the trustee. Its kind of scary to rock the boat so close to the finish. Thank you always for everything!

[LadyInTheRed]

JB covered it. Ask your attorney first.

I asked my attorney and he said I can borrow from my 401k without court approval, as long as I can make the payments and my plan payment, because I am borrowing from myself.

I recommend borrowing from your 401k only as a last resort. I used it to replace a truck that had been totaled to buy a newer truck than what was being replaced. I regretted it. I know that paying a low interest rate to yourself is attractive. But, every time I saw a position advertised that I might have considered applying for, I remembered that if I left my job, I would have to pay off the loan or pay income tax and an early withdraw penalty. Fortunately, I have a lot of job security and never seriously worried about an involuntary job loss. But, you never know! When my husband I decided late last year that we don't really need a truck, I was able to trade in the truck for a new car and get enough cash out of the deal to pay off the 401k loan and still make a significant down payment on the new car with a low rate for the balance of the purchase. I was relieved to pay off the 401k loan even though I am now paying interest to a bank instead of to myself.

[dmc-2008]

Thank you! There is no chance if me leaving my job I am a couple if years away from retirement and would make it so cheap and easy to be paid off by then so I have it for retirement! Thank Lady and JB for this and all u do!