If a participant took out a loan in 2004 and now wants to refinance that loan and take additional money out, can the term of the loan be for a new 5 year period? No loan limits are being exceeded dollar wise.

So for example if the the loan taken in 2004 was taken for a five year period - so the loan would be paid off in 2009, has a current balance of $4,000.00.

Now December, 2006 the participant wants to refinance the existing loan and take out an additional $5,000.00. Can the loan be amortized over a new five year period - loan being for $9,000.00 paid off in 2011?

Thank you.

No. the original loan must be paid off within 5 years (i'm assuming its not a residential loan) so the re-fi must be paid in full no later than 2009.

There is another way to skin the cat. You need to look at the regulations.

QDRO - would you care to enlighten me? I looked in the ERISA outline book and there is an example in there that seems to fit my situation, but I'm not sure if there are any catches to it.

Sorry, I am pretty tied up, and I am not inclined to be doing specific work anyway. Others may be more generous. The more sensible solution is to provide for another loan rather than refinance and end up with a single loan that has to satisfy two layers of requirements.