SBA Loan Workout: Must Pension Savings Be Listed On Your PFS?

I lately had an argument with a customer regarding the structure of his personal financial statement. My client was essentially attempting to rationalize intentionally omitting product information regarding his personal financial situation, while I realize where he was originating from. I had to create him straight, since it's my job to simply help borrowers do it the best away. It went something similar to this:1) The initial point we argued was whether it's appropriate to list his funds savings on his personal financial statement.&lt;br /&gt;&lt;br /&gt; His principle was that since the form did not specifically inquire about his 401k, then he was under no-obligation to list it. He also contended that since resources that are used in specified retirement accounts are normally shielded from creditors, there is no reason to list it.My Response: The SBA clearly really wants to know about any and all assets, irrespective of if they may be levied by creditors or not. It was clear to me that in this example, it'd be disastrous to omit his 401k from your PFS since his paystub (which was required included in the OIC) showed that he was making monthly contributions. Once a lender discovers that you've omitted your 401k from your PFS, they'll question whether you are negotiating in good faith. Since the SBA does ask the financial institution when you yourself have been cooperative, your attempt to abandon an important asset could hurt your chances for a settlement approval.The second stage he tried to fight was that since he would be borrowing against his 401(k) to invest in the settlement, that it was technically a liability, not an asset.&lt;br /&gt;&lt;br /&gt;My Response: While I can appreciate your need to rotate the situation, that is factually perhaps not appropriate. As you had be borrowing against the 401k, it would only be borrowing against a property. Because the SBA requires you to express the source of the OIC resources, to omit the 401k would mean you are perhaps not being exact when stating the source of the settlement funds.Overall, I am aware my clients temptation to leave his most valuable asset off the PFS, in order to increase his chances that his OIC will be approved. That said, intentionally misrepresenting your position is never anything I'd supporter. Brokers are wise, and they've tools at their discretion that may allow them to determine if you've left assets off your PFS. So the lesson, as always, is that when submitting your OIC you need to be honest and tell the reality!