Guest jlbishop Posted October 24, 2002 Posted October 24, 2002 What happens if you take a loan on your 401k, then become disable and can not cont. to pay the loan?
Guest dhp2 Posted October 24, 2002 Posted October 24, 2002 Generally, a plan is allowed to provide that participants on authorized leaves of absence (such as disability leave) may suspend loan repayments for the lesser of one year or the length of the leave. If the participant has actually separated from service due to the disability, the terms of the loan agreement and/or plan document probably provide for immediate default of the loan regardless of the reason for the separation. In any event, look to the Plan Document and the Loan Documentation first, to see if any rules have already been established for this scenario.
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