I only hear of defaulting on a 401(k) loan after you are no longer employed. How did your husband manage to default on a 401(k) loan when the employer is supposed to ratably pay back that loan with each of your husband's paychecks?

You can take a loan out of your 401K; however, the loan must be repaid. If you attempt to take out another loan, your employer will undoubtedly discover the omission and you will have to make repayments on the original loan. I doubt you will be able to get another loan unless you have paid off the first loan.

To answer your question. . He was in car accident and we were supposed to make payment manually . . We didn't know we had to make payment while on disability. Ended up defaulting

Thank you for the additional information.

There is no federal law that I am aware of (within or outside of ERISA of 1974, which governs 401(k) and other retirement programs) that prevents you from borrowing from the same 401(k) again, even after a default. [I am assuming that the defaulted loan was eventually paid back in full, with interest.] The decision to allow another loan is up to the Plan Sponsor/Administrator (sometimes this is the employer and sometimes it is a separate financial institution that is running the plan for the employer).

You can certainly ask the Plan Administrator directly (if the employer, then HR is most likely the place to call), but I would also suggest looking at the SPD (Summary Plan Document/Description) and any SARs (Summary Annual Reports) issued since the time you received the SPD. They will tell you if there are any limits placed on loans from your 401(k) account.

Let me also take this time to stress that I believe that loans from your retirement plan should really, REALLY be one of the last methods that you use to pay for life's expenses. Beyond that, I wish you well!