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In 1998, Mr. White borrowed $12,321 from his 401(k) account
to help finance his oldest daughter’s college education. The
amount borrowed was one-half of the account balance. The terms
of the loan required repayment within 5 years based on level
amortization through direct deduction from Mr. White’s paycheck
on a semimonthly basis.
On September 7, 2000, petitioners filed a voluntary petition
in bankruptcy under chapter 13 of the Bankruptcy Code. Following
the meeting of creditors on November 13, 2000, the Bankruptcy
Court issued an order, which was entered on the court’s docket on
November 14, 2000, confirming the chapter 13 plan and providing
notice of a 25-day period within which to object. An objection
filed by one creditor was subsequently withdrawn. Accordingly,
the court’s order became final, pursuant to its terms, upon
expiration of the 25-day period.
During the initial phase of the bankruptcy proceeding,
Graphic Packaging continued to deduct loan payments from Mr.
White’s paychecks. However, after notification in mid-December
2000 by the bankruptcy trustee regarding the finality of the
court’s order confirming petitioners’ chapter 13 plan, Graphic
Packaging stopped deducting loan payments from Mr. White’s
paychecks.
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Last modified: May 25, 2011