Legal Question in Bankruptcy in Michigan

Can I claim 401(k) loans in bankruptcy

I am curious about being able to claim my 401(k) loans in a bankruptcy. Is this allowable?


Asked on 3/14/98, 9:55 pm

1 Answer from Attorneys
Daniel Press Chung & Press, P.C.

Discharge of 401(k) loans in bankruptcy

You can discharge personal liability on 401(k)loans in bankruptcy -- in fact, you mustschedule them as creditors. However, such loans are secured by your account, and the effect of failure to repay is that the planwill simply withdraw the unpaid amount from your account and you will be hit with thetax consequences of an early 401(k) withdrawal.

Read more
Answered on 3/19/98, 8:51 pm


Related Questions & Answers

More Bankruptcy Law questions and answers in Michigan