Solo 401k loan repayment by payroll deduction and exclusion from bankruptcy

[Sean Polete]

Is a solo 401k loan repayment plan by payroll deduction exempt from the bankruptcy estate under ERISA anti-alienation clause? BAPCPA also exempt payroll deductions to repay plan loans from the bankruptcy automatic stay provisions because Retirement plan loan obligations are not discharged in bankruptcy.

Sean Polete

Contact

[Mark Nolan]

Generally, as long as the solo 401k plan is still active it is protected in bankruptcy from creditors including the participant loan payments. Once you stop being self-employed, the plan would need to be shutdown and transferred to an IRA.

Mark Nolan

Compliance Officer

Contact

1-800-489-7571 www.mysolo401k.net