Am I allowed to borrow money from my 403b while in CH. 13?

[NeedOptions]

My wife and I currently contribute money toward a 403b (Tax sheltered annuity retirement plan) and I was wondering if I am allowed to borrow from it? Will the trustee have a problem with this? It is essentially my money that I am borrowing from as I am contributing toward it every month. Thanks.

[IamOld]

We were told that anything over $5K (like that would happen!) needs Trustee permission - I would say if what you are going to borrow is below such a threshold, if you were given one, is ok, but if you don't know - or if it's more - ask your atty!

[lrprn]

Even though you are borrowing from yourself, most 403B plans still charge a low interest rate and put a "must-be-paid-back-in-full" date on the amount borrowed. There are significant financial penalties (often 10% of the total borrowed) if you can't pay the amount taken out back in time.

From some very bad experiences shared here over the years by other Ch 13 filers who borrowed from their retirement accounts and then found they could not pay the full amount back in time, I would put doing this as a "last resort - my bk lawyer says this is our only choice or we'll be dismissed" kind of option.

IAmOld is right - be sure talk to your lawyer first, find out what needs to be done before pulling the trigger, and what may happen to your plan if you can't pay the "loan" back in time.

[NeedOptions]

Thanks guys. I have a meeting with my lawyer tomorrow. I'm only planning on borrowing $2k so paying it back will not be a problem.