SHOULD I CASH IN MY RETIREMENT TO PAY MY DEBT?
The straight up answer here is NO! This is a bad idea! You have worked hard and saved up your retirement for your whole life. Bankruptcy may be available for you. Under the federal code your retirement funds are protected. You can file for bankruptcy protection and keep your retirement accounts for when you retire.
WHAT IS BANKRUPTCY?
A federal code set up which will allow a debtor to discharge all of their unsecured debts. Once a discharge is issued creditors can no longer collect on debts included in the bankruptcy. You do not have to pay any of these debts and you do not need to report the filing to the IRS as income. There are two main chapters filed by most consumers which are Chapter 7 and Chapter 13.
Chapter 7 is the most common bankruptcy filing. It goes by many names, Chapter 7, straight bankruptcy, simple bankruptcy, liquidation bankruptcy and so forth. In a Chapter 7 you will be able to discharge all of your unsecured debts. If you have secured items you would like to keep such as a home or vehicle you will be able to reaffirm on these debts through your case. Chapter 7 is sometimes referred to as a liquidation bankruptcy because the trustee in a case may liquidate some of your assets, however, most assets are protected under the state exemption levels.
Chapter 13 is designed for those who are over income for Chapter 7 or who are behind on their homes or vehicles. Chapter 13 is a repayment plan. Under Chapter 13 you will have three to five years to make up payments you are behind on your home or vehicle. The trustee will make these payments for your. You will pay back a percentage of your debts to your unsecured creditors. You will receive a discharge at the end of your case.
For more information check out our website at www.keegancolpa.com.
Contact your Eastgate, Ohio bankruptcy attorney to see is bankruptcy is the right decision for your.