Retirement accounts are supposed to be there to provide financial support in the post-working years. They are also, at its basic core, a pool of money that can be tapped into even though a penalty has to be paid upon doing so. Many who are contemplating bankruptcy also consider the idea of using their retirement accounts to pay off debt. Using a retirement account for paying off debt is the worst possible thing that one can do. Bankruptcy protects retirement investments, and does not consider them to be a source of money to repay debt. Laura Margulies & Associates LLC can help explain this further.
What this means is that someone who is looking to get out from underneath their debt do not have to worry about losing an IRA or a 401(k) to creditors. The law does not classify these as being a source of income, even though they are used for investing money for use later. As long as the debtor leaves them alone and does not break into them during a bankruptcy, the money is protected and creditors can not lay claim to the funds in any manner.
Ultimately, this should not be a reason to defer filing for bankruptcy. The debts are real, the creditors are pressing, and the income can not keep up with the payments. Submitting a petition sooner than later means that the process is over with sooner than later, and it’s possible to move on without the burden of debt. Being able to retain most or all of your income after bankruptcy is freeing, and you can start working on your credit rating almost immediately after discharge. In the long run, bankruptcy is a temporary blip in your life that gets further and further into your past as you look forward to a much brighter future without all of that debt on your back.
Are you looking to get out from underneath your debts and move on with your life? Contact Laura Margulies & Associates LLC to set up a consultation today. Talking with a lawyer can help clear up questions and concerns that come with filing for bankruptcy.