Loan Default after Leave of Absence

[Guest Dumb & Dumber]

When would you do a loan offset for someone who went on a leave of absence one year ago and did not start payments after the year was up.

Would you do the offset on the 1 year anniversary of the start of the leave of absence?

Or is the first payment due on the 1 year anniversary of the start of the leave of absence. Thus the default / offset will not occur until the end of the cure period. With the cure period being the end of the calendar quarter following the calendar quarter of the missed payment.

[Jim Chad]

I would like to know what others think so I am going to start the discussion my stating my guess. I think the first payment is due on the 1 year anniversary of the start of the leave of absence. Thus the default / offset will not occur until the end of the cure period. With the cure period being the end of the calendar quarter following the calendar quarter of the missed payment.

[Guest Dumb & Dumber]

That was the answer I was leaning towards but wanted to make sure others agreed.

[QDROphile]

Matters of default are covered by plan terms and loan document terms, which need not follow the outer limits of what the law allows. I assume that the question arises becuse the plan terms and loan documents do not provide adequate guidinance. But then you should be asking the question, "how do we apply the plan terms?" to the question, not "what is the law?" You may get to "what is the law?" if that is where the plan terms send you or leave you. Others can't help if you are still at the stage of asking about document terms unless you report what the document says.