Posted on: 27th Jan, 2009 11:15 am
No one has really answered the question. My husband took out a loan on his 401K. Repayment is over $100 per week. Now his company has cut his salary by 15%, plus a big cut in weekly hours worked which totals up to about $1,200 less a month. He is going to have to file bankrupcy-can he fule it against his loan and not have to pay it back? If they continue taking it out, we will not have enought to pay just basic cost of living bills.
Hi Tese,
It will depend upon the type of bankruptcy that your husband will be filing and the asset limit that he has. I guess, he wants to file bankruptcy only because of the 401k loan and include that in bankruptcy. In that case, he will have to file Chapter 13. Once he files chapter 13, then the employer will stop deducting $100 from his salary. Rather, he will get a repayment plan through which he will be able to pay off the loan within 3-5 years.
Thanks,
Jerry
It will depend upon the type of bankruptcy that your husband will be filing and the asset limit that he has. I guess, he wants to file bankruptcy only because of the 401k loan and include that in bankruptcy. In that case, he will have to file Chapter 13. Once he files chapter 13, then the employer will stop deducting $100 from his salary. Rather, he will get a repayment plan through which he will be able to pay off the loan within 3-5 years.
Thanks,
Jerry