May a participant loan be included as indebtedness in a bankruptcy? If so, may participant loan repayments be suspended when the bankruptcy is filed?
Rev. 10/13/05, E-mail Alert 2005-20,

The answer is "no" to both questions. Under the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA), an individual may not suspend the repayment of a participant loan from either a qualified plan or 403(b) plan due to the individual's bankruptcy filing. The loan must be repaid, and the participant loan is not to be included as part of the indebtedness in bankruptcy estate.

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