Will some financial institutions accept a 401k as collateral for a loan? I want to use the 401k first to get the loan and second to keep the loan rate low by provided collateral. I dont want to take money out of the 401k... Thanks.
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401k used as collateral
Feb 25, 2007
1 Replies
I don't see how as a 401(k) is a qualified plan under ERISA (Employee Retirement Income Security Act) and as such the assets are protected from creditors. Remember the O.J. Simpson civil trial? OJ lost and the plaintiffs were awarded millions of dollars of compensatory damages. O.J. had a $4,000,000 pension that was not subject to civil court judgments.
-- Alan
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