Does anyone know if/how you payback your loan to fidelity if you are laid off?
Someone has told me it is written off by fidelity/Halliburton as a hardship and no repayment is required as long as you don’t quit or get fired.
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You have to replenish that money in 90 days or else you owe nothing and get a nasty 1099 at the end of the year that you owe taxes on and a 10% penalty if you didn’t use it for school, first time home buyer, medical, etc
Save 401k and sell wifey to friends and neighbors.
I believe they give you 90 days to pay it off, then it just becomes another debt you owe.
It’s not stupid to borrow money that you pay yourself to borrow. Stupid is paying a bank what ever percentage to borrow their money. Worst case scenario and you can’t make the loan payments you will just get taxed on that amount at the end of the year.
You realize you get it back as soon as you pay it off cause it’s still your money.
Why were your stupid enough to take out a loan on your 401k? No wonder you got laid off
You can only take half of your vested amount when taking a loan. This ensures that Fidelity will be able to recoup the funds. If you can't pay the loan off almost immediately after termination, they will deduct it from your 401k which said amount becomes taxable income for that year, but had no taxes taken out so be careful.
You can bet that it wouldn't be allowed to be 'written off'
When I took one out 2 years ago, I asked this question of the fidelity rep and they said that it was due immediately upon termination but if it couldn’t be paid that it would be counted as a default but not reportable to a credit bureau since it’s your own money. However you would be liable for the outstanding balance considered an early withdrawal by the IRS and that balance penalized/taxed accordingly.
I had to pay mine off immediately. Good thing I had a decent severance package. My buddy had to get a loan to pay off his.