What happens if you default on a 401K loan?

Lost a large portion of household income, can no longer afford to cover the mortgage and repay 401k loan (used to consolidate prior to the loss), facing foreclosure or default of loan. Aware of it being turned over to the IRS, but then what? Current employment (two jobs) isn't enough to cover debt.

What happens if you default on a 401K loan?

Check with the plan, but a default is generally considered a withdrawal of funds. This will be a nightmare of a tax bill (plan on 25-35% to taxes) and you don't have the money for retirement.

What happens if you default on a 401K loan?

What happened to me was that I lost my job. The loan I could not pay simply became a withdrawal of funds from the 401k plan that I had to pay taxes on. But, plans are different. Check with your employer about this. Human Resources will tell you who to talk to.