I am going to borrow against my 401k for the money

Date: Thu, 03/24/2011 - 07:10

Submitted by Mrs Extended
on Thu, 03/24/2011 - 07:10

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Total Replies: 2

I am going to borrow against my 401k for the money to settle my credit cards (I know there are disadvantages to doing this but it is currently my only option). Are the credit card companies able to see how much money I have in my checking account? If so, should I deposit the money in someone else's account? And if I have my bank account with Bank of America and one of my late credit cards is with Bank of America, what should I do then? Confused!

I really dont recommend this. There are too many disadvantages

I really dont recommend this. There are too many disadvantages and draw backs.

BofA might be able to see what you have in your account but your other creditors cant.

lrhall41

Submitted by SOAPLADY on Thu, 03/24/2011 - 07:14

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I would open a checking account at another bank just for your se

I would open a checking account at another bank just for your settlements. When you are finished, you can close it.

As to borrowing from 401k, if you are over 59-1/2 you can make withdrawals without penalty. No need to borrow.

If you borrow, you must repay the amount plus interest. Should you not repay the loan, then you will be hit with a 10% penalty plus owe taxes on the amount borrowed as income. Should you come into some money at a later date, you can pay off the loan.

I withdrew from my 401k (am over 60) and did a pension loan (gov. worker) to pay my settlements. The pension loan is the only debt that I now have, and I deal strictly with cash. Peace of mind - priceless!

lrhall41

Submitted by aubrey on Thu, 03/24/2011 - 07:20

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