52626 Posted April 14, 2016 Posted April 14, 2016 Participant filed for bankruptcy in 2015. Now he wants to take a loan from the 401(k) Plan. Any reason preventing him from taking the loan? Since a loan is not a taxable event, am I correct in thinking the loan amount is not subject to creditors? Does the fact he filed bankrupt impact his ability to take a loan???
My 2 cents Posted April 14, 2016 Posted April 14, 2016 Not a lawyer, but wouldn't post-bankruptcy assets be protected from the pre-bankruptcy creditors? Always check with your actuary first!
Lou S. Posted April 14, 2016 Posted April 14, 2016 Unless there is an expectation that the loan won't be repaid I'm not sure why a prior bankruptcy will impact his ability to take a participant loan.
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