Took out a 401 loan in Jan of 2006- Potential Problem?

[DisneyGirl]

3. how can you have two 401k loans, impossible, I am in the business.
you either have two seperate employers, or one of those 401k loans is your wifes. Most employers force you to pay back 401k loans on demand, upon termination. Mine did, I think I had 90 days. They have no way to accept the payment from payroll without you working there.

As already mentioned, you can have more than one 401K loan at a time. Not that you should but you can. Second, depending on the company your 401K is through you may or may not have to pay it back if you lose your job within 90 days. As in my husband's case, he was laid off and now he has a payment book to pay off his 401K loan. He does not have to pay it back any sooner than if he were still employed.

[scammer]

Sorry, but this time your info is inaccurate.

I also have two 401k loans. I'm not allowed to take any MORE 401k loans until I pay off one of the others, but I do have two on the same 401k. One taken out about 2.5 years ago and the other about a year ago.

As for the worry about what they spent it on? Yeah, you're probably right there. $1600 payed to ANYONE, especially a family member, would probably be considered a preferential payment, and the trustee won't care where the money came from.

Yes, your right! See shouldn't be typing on computer at 4am with no sleep. Yes many employers allows multiple loans against plan assets. Mine never did. I was thinking they had two jobs, or left the last job and still had the loan in force, and did another with new employer. Surprised about the loan, been in the business 14 years and most employers don't want the administrative cost that the custodian charges for old employee. May I ask what Co.?

[scammer]

I'm a state employee. We can have up to 7 401k loans maximum. Years ago I had 5. We can only borrow up to a certain percentage of the balance. They come directly out of my paycheck. They do demand payment upon termination or you will receive a bill for the taxes and penalties.

I'm not a saint but if I tell the trustee that all that money went to a trip.....I'm going to be screwed when he looks at the bank statements and sees the checks in those amounts sent to dell and other bills. I thought it was all about not lying to the trustee? I'd rather take my lumps on paying those bills than take my lumps on lying to the trustee and getting my BK thrown out.

My Atty says I can go with the Ch7. He also said the 401 loans will not be a problem.

I realize that the 401 is protected money but I've always used it as a cushion for when things go wrong. I'm not counting on it for retirement as I will have a state pension and a 457 deferred comp plan that I will use for retirement. Both are ERISA protected and will pay me nearly 90% of my wages when I retire....waaayyy down the road.

Up to SEVEN!!!! Thats terrible!! What happens to the poor person that loses their job, were are they going to get that money so fast? Everybody will be raiding the thing for this that and any other reason, just curious, what is the maximum percentage you can tap it for? I am big supporter of clients contributing to their employers 401k, never have I heard of multiples like this, Out of 300 relationships, I think I have seen 3-5 total loans ever, sounds pretty Irresponsible if ERISA lets this happen. Ck's right from your account, oops, maybe he will ask for those dollars back, wonder what he will do within 12 months of filing, not a big deal $ wise. My wife used to be state employee, 90% retirement income is awesome.

[Winger19]

Yes it is a bit irresponsible. I had 5 at one time. I took one for a downpayment on my house. One for a new furnace. One for remodeling. Can't remember what the other two were for.

I believe it can be tapped for up to 50% of the account. It can be done online and is way too easy. At the dept. I work for it's a common thing for employees to do it for just about any reason you can imagine...trips...boats...unexpected expenses.

I do use it probably more than I should but I don't expect to use it as retirement income. I have a 457 plan along with my state retirement. The 457 has similar investment opportunities as the 401 but you can begin drawing off of it immediately after retirement, termination or when you quit. You are taxed of course but there is no early withdrawl penalty as long as you no longer work for the state.

[anonymuse]

Geez, am I stupid or what????

I don't like to give advice, for fear of it not being gospel. I just read this as I was walking out the door of the bforum.

1 taking money out of a 401k, it is protected $$$ my friend???

boy i gotta get out of here and get some sleep, before I mispell any more words, wait till sinkingfast sees some of this, she likes all the rules on this and that.

No offense, but play nice please! This is NOT all common sense. I couldn't get help with a medical program for the indigent because I had a very small 401K plan. When one part of the government starts saying it's not okay to have that money, you don't know for sure what other parts are doing.

The whole thing about changing BK laws last year didn't phase me. I really had never even thought of BK in my life. You heard about the high profile Trump-like cases and wondered "how in the world can you make billions, have a BK, and still have billions?" Never knew anyone who filed--correction, noboby I know had ever spoken about filing. The only thing I knew about the new laws was that there was a piece on the news showing a line around the block with people filing. I didn't pay attention to any of it since I always thought that will never be me, the economy will pick up, I'll get back to my old salary, and it just wasn't an option.

When you do make the leap to considering it, you have a lot to learn and we're all here to help everyone else out.