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1forthemoney · Jul 28, 2006, 12:00 PM

I need $22500.00 to pay off debts. Why do I have to qualify in order to get my money when I have $54,000.00 in my 401k. I need to pay off debt not pay for funeral.. If I don't pay off my debts I am looking at losing my home in the near future as they raise my interest rate from 8% to 11 %. How can I get my money?:mad:

CaptainForest · Jul 28, 2006, 12:48 PM

Why not try to go to a new bank and try to get a new mortgage at a rate lower than 11%.

1forthemoney · Jul 28, 2006, 01:01 PM

Believe me I have tried. My husband is the primary holder on this account and his credit scores are very bad!! 490 That's why.. I would love to find and independent lender and pay him/her $2000.00 in erturn to loan me just $9000.00 so I can pay off my 401k loan and then I'd have access to $54,000.00 in a two week period. But I don't know where to go for that type of money

CaptainForest · Jul 28, 2006, 01:04 PM

What about your credit score? Are you able to qualify for a loan?

1forthemoney · Jul 28, 2006, 07:13 PM

My Credit Score Is 490 Which Means No Loan

Cassie · Jul 28, 2006, 07:26 PM

I did not quite understand, do you want to cash in part of your 401K to pay off your debts, or did you think you could use it as collateral for a loan?

1forthemoney · Jul 28, 2006, 10:56 PM

I have a 54,000 401k right now. I can withdrawl 27,000.00 of it if I need to (which I do) But first I must repay the loan I have out on it at the present time which is in the (balance)amount of 9101.00, I can't seem to find anyone any where that can or will loan me the $9000.00 so I can turn around and take out 23,000.00 pay the company or person back then have the bablance to pay off my debts. It's amazing because the whole process only takes 10 business days. So I am forced to take a withdrawl that we all know is going to cost me a lot of money. But even at this they want me to verify that I am losing my home to foreclosure (which I'm not) or get a statement from my 2 sons colleges stating the financial obligation I am under and so on... It's my money!! Why do I have to give them any documentation? Or DO I??
1forthemoney

Cassie · Jul 29, 2006, 03:52 AM

I do not know why you have to have documentation for those things. Are you planning on borrowing the money again or just withdrawing it? Are you saying there will be no penalty if you have documentation? It is your money you should be able to withdraw it when you want. There will be the penalty and if you are not old enough you will have to add it as earned income.

ScottGem · Jul 29, 2006, 07:38 AM

While it may be your money, it was deposited into the 401k under special conditions. Those conditions were that taxes are deferred on that money until distribution at retirement. Any withdrawal prior to retirement therefore incurs penalities, unless it qualifies as a hardship under the laws that establish 401ks.

Some 401ks allow for a second loan. Talk to your 401K admin. Maybe you can get a second loan or they will allow you to use the proceeds to pay off the first loan. I would strongly urge you to use a 401K loan rather than withdrawing the money.

1forthemoney · Jul 31, 2006, 12:09 AM

Cassie and Scott
Thank You for your imput. It is my money and like Scott said it's put away with stipulation for one purpose, my retirement. I can not take a second loan out even with the intentions of paying the first one back, some companies are set up that way but not mine.. The very last resort Scott is a withdrawl because god that would cost me so mush now and so much later in life... I think I found a personal lender to lend me the $9000 so I can get at least $23,000.00 (in a new loan) 401k)... I think this has been a great learning lesson for me in life... lesson being "stay out of debt" throw the Credit cards away, let the Kids fend a LITTLE for themselves. Thanks you guys I appreciate your conversations