Tuesday, 4 March 2014

I borrowed from my 401k hardship to pay my balnce owing past due on mortgage. They won'tt accept the money now and have started foreclosure ...

Question

I borrowed from my 401k hardship to pay my balnce owing past due on mortgage. They won'tt accept the money now and have started foreclosure proceedings now i have to file chapetr 13. Will this effect my filing. will i leagaly get in trouble for borrowing from my 401k. Please help i'm worried and don't know what to do.



Answer

Depends upon how you withdrew the money. Preventing eviction and/or foreclosure is a legitimate reason for hardship withdrawal. Did you mention that as a reason for withdrawal? If you did and can show refusal letter from mortgage company - refusal to accept mortgage - you should be safe simply because you were acting in good faith.

Contact us for more details - 734-779-1662.

Best - JS



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