loan default delay

[TPApril]

one-person plan in which owner has a loan with quarterly payments.

They want to push off loan payments by a quarter.

Doesn't seem right, but in so doing, they never default.

What could go wrong?

[Bill Presson]

I think they misunderstand the cure period. The end of the quarter after the missed payment is the time to have all payments caught up. Not just the missed payment. 
 

https://www.irs.gov/retirement-plans/issue-snapshot-plan-loan-cure-period

[TPApril]

Thanks! That's what I needed!

Their other circular question was - should they take an allowable in-service distribution to pay off the loan, rather than defaulting and thereby having an outstanding unpaid loan balance within the plan which would limit future loans.

[CuseFan]

18 hours ago, TPApril said:

one-person plan in which owner has a loan

18 hours ago, TPApril said:

What could go wrong?

I think your first statement was the answer to your question, LOL, as these situations often get treated like they are personal bank accounts rather than QPs, IMHO.