Guest Twinky Posted May 30, 2008 Posted May 30, 2008 I have recently taken over a plan where the participant took a hardship, rather than a loan. (The plan allows both.) Apparently the hardship distribution was not enough to satisfy the need (they said they thought they would be able to get more). So now they want a loan. Can they now take the loan? Also, the suspension lift for the hardship isn't until October. I just need to confirm my thoughts... My thoughts on this is that they CAN take a loan, and although THEY can't contribute to the plan until October, they could make loan payments to the plan. Am I correct in my thinking?
Kimberly S Posted May 30, 2008 Posted May 30, 2008 Isn't one of the requirements to qualify for a hardship that they have to have already taken any available loans both from the plan and other sources?
masteff Posted May 30, 2008 Posted May 30, 2008 Isn't one of the requirements to qualify for a hardship that they have to have already taken any available loans both from the plan and other sources? Yes, unless taking the loan would increase the participant's hardship. To the original question... yes, the participant can take a loan. Loan payments are not contributions. Kurt Vonnegut: 'To be is to do'-Socrates 'To do is to be'-Jean-Paul Sartre 'Do be do be do'-Frank Sinatra
Guest Twinky Posted May 30, 2008 Posted May 30, 2008 Yes, I agree the loan should have been taken first, but this was done prior to us taking it over, so we had no control over it. Thank you for all your responses!
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