Reversing a loan payment

[Guest mkelly]

A participant paid off an outstanding loan, but now wants to reverse that payment. In other words, he wants to assume the loan payments again.

Is this okay?

[Guest F1fan]

If the payment has been deposited in the plan's trust, what would be the basis for removing it? As an alternative, can the participant request a new loan?

[Guest mkelly]

In a nutshell, the partic paid off the loan, thinking he could take out another one for more money, but he can't. The plan Administrator initially told him he could. So the plan wants to allow him to reverse the loan payoff and the Er will make up any loss that occurs.

[Brian Gallagher]

My thoughts: since this is obviously not a bone fide mistake of fact, the money needs to stay in the trust, so I don't really see a way for the participant to get that money back.

maybe the company can loan him the money and he can pay them back. To me it would be the same thing, except that the loan payment was invested all at once, rather than in intervals.

[Kirk Maldonado]

Before the company makes that participant a loan, it better look at the new legislation that Bush just signed (precluding loans to executives under certain legislation).