Share:

Many people believe bankruptcy should be a last resort, only to be pursued once they have exhausted all other options and personal resources. Unfortunately, this can mean invading otherwise exempt retirement savings to pay bills before deciding to file a petition to have their debts discharged. Thomas A. Corletta, Attorney at Law, a bankruptcy and family law attorney serving the Rochester, NY, area, urges everyone to avoid this serious mistake, which could dramatically impact the rest of your life.

bankruptcy

The amount you have invested upon retirement may be the single most important factor in determining quality of life after you have stopped working. Many borrowers withdraw money from these accounts, assuming they'll have time to replace it later. However, the power of compound interest means robbing your future of more than the amount withdrawn to pay off your bills. Over time, even a relatively small amount could have doubled, or even tripled in some cases. You will also incur tax liability for such withdrawals, compounding the mistake.

Even if these assets are enough to pay off some of your bills, you'll essentially be wasting this money if you eventually have to file for bankruptcy anyway. Unsecured debts, like credit cards and medical bills, can be discharged in a Chapter 7 bankruptcy, so there is little point in using up vital exempt assets you'll need in retirement to pay debts that could have been eliminated. Most retirement accounts, including Roth IRAs and 401(k)s, are exempt from bankruptcy, so you will be able top protect them in a bankruptcy.

With over 36 years of experience and a wide range of legal services, Thomas A. Corletta, Attorney at Law will help with everything from bankruptcy to criminal defense. Visit his website to learn more about his reputation for providing excellent results, or call (585) 546-5072 to schedule a consultation with a skilled, knowledgable attorney today. You can also find him on Facebook and Twitter.

tracking