SHOULD I CASH IN MY RETIREMENT TO PAY MY DEBT?
The straight up answer here is NO! Bad idea! You have worked hard and saved for retirement for your whole life. Your retirement is just for that, your retirement. Most likely you are currently employed which provides funds for your needs just as your retirement funds will provide for your needs in the future. If you are already retired then you need these funds now, these are your funds to provide for your needs, you need these funds, do not cash them in to pay debts.
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 they will be needed..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 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 call us at 513-752-3900 to schedule a no obligation, free consulation with an experienced attorney. Since 1997, Keegan and Company Attorneys has helped thousands of people of the Cincinnati area get well deserved financial relief and asset protection. We are here and available to help you!