Retirement Accounts and Bankruptcy
Posted on Thursday, June 25th, 2015
Hello again, Sacramento! Real simple one here guys. Do not empty your retirement accounts to pay off debt without consulting me first. As always, we don’t give out legal advice on our blog as that is usually done face to face. But generally speaking, it is not productive to empty your retirement accounts as a measure to pay off debts.
When people are drowning in debt, their financial ship has struck an ice berg and the ship is sinking. When you pull money out of your retirement account in order to pay off debt, you are basically trying to pump water out of the sinking ship in order to avoid sinking. In all likelihood, that ship will sink no matter what. Too many times, clients have come to me needing a bankruptcy 60 days after emptying their retirement accounts trying to avoid the bankruptcy.
The life boat is there. It is available to you pursuant to our constitution since the very founding of this nation. Retirement accounts and Bankruptcy are two very valuable things as these accounts are almost always protected in full from your creditors. Bankruptcy can be used to eliminate debt and provide you with a chance to rebound financially and build your assets up for you and your family. Look, if you have $250,000 saved up and your debt load is minimal then perhaps using some of these funds to get out of a small but serious problem would make sense.
Most people facing the prospect of emptying their retirement accounts are facing a great number of debts that cannot be properly addressed by their retirement savings. It is likely that tens of thousands of dollars can be saved using Bankruptcy to eliminate debt, protect your assets and get going on a better future for your family. All in all, you should talk with us before making a critical financial mistake. We’re here. All week long. (916) 419-1111.