We lost $8,000, and it was no problem.

(Megan, this is the story that we said we’d tell you later, because we didn’t want you to worry. (; )

The original plan was that we’d pay off my 401(k) loan of $22,500 and take out a new loan for $30,500. We’d end up with $8000 more than we started with, pay off the nice folks who loaned us the $22,500, and split the $8000 by giving $5000 to Marty and investing $3000 in the Usual Error Project. The person I talked to at The Hartford assured me that this plan would work flawlessly.

It didn’t.

There’s an IRS regulation that you can only borrow $50k from your 401(k) in a 12-month period. Since the original amount of the loan was $27k, that meant that I could only borrow $23k. I had gone through all this rigamarole and asking friends for favors just to put a bunch of money in a box and then take it back out. My interest rate (which I pay to myself) went down from 9% to 6%, so that’ll save $120/month, but sheesh, not exactly what we were hoping for.

We had already promised Marty the $5000 so he could quit his job at Kinko’s. He had already put in his notice and was depending on us. Our two friends who spotted us the $22,500 were also depending on us to pay it back within 3 weeks. The Usual Error Project also really needed that $3000 to get it rolling.

I flipped out.

I spent two hours on the phone with various reps and supervisors at The Hartford, verifying that I was screwed. I filed a formal complaint against the rep who had told me that I would definitely be able to take a new loan in the amount of $30,500.

“We are so screwed! We just lost $8000 and there’s nothing we can do to get it back!” I yelped to Kyeli.

…Stay tuned for the exciting conclusion!