You May Not Have to Liquidate Your Retirement Accounts
If you are facing pressure from your creditors, you might have a unique opportunity to pay back debt without liquidating retirement accounts. After filing for bankruptcy, all retirement funds like 401ks, 403bs, and college fund IRAs are safe from creditors. Filing for bankruptcy can help to protect your future. To learn more, it’s in your best interests to contact an experienced debt relief lawyer.
A Common Scenario
One of the saddest situations I see is people who want to file for bankruptcy after they’ve liquidated their retirement accounts. In desperation to pay off their debts, they use the money from retirement accounts to pay off their creditors. But then tax season comes. The taxes imposed on the withdrawal from retirement accounts is too much to bear and that’s when they realize they need protection under bankruptcy. Unfortunately, bankruptcy doesn’t do much to relieve tax debt.
To make matters even worse, now that the retirement funds are liquidated, the cash on hand isn’t protected from creditors. They can garnish nearly all of it. The people in debt are stuck. They have very little money to live off of, no money to retire with, and debt continues to pile on.
Talk to a Debt Relief Lawyer First
Even under bankruptcy you can continue to contribute to retirement funds. You can have a vehicle worth no more than a specified amount, but your retirement account can have any amount and nobody can touch it.
Bankruptcy is intended to allow people to build up for their future. A big part of most people’s future is retirement. We understand the important of retirement accounts and the government helps to protect them under state bankruptcy laws. So even if you inherit an IRA account, creditors and banks cannot touch it.
Before you make any withdrawals out of the ordinary to recover your debts, call us to speak to a debt relief lawyer who can help. We’ll make sure you can continue to live a dignified lifestyle and still retire.