Dothan, Alabama
111 Adris Place
Dothan, AL 36303
(334) 673-0100

Debt Consolidation: Should You Pay Bills With Your Retirement Funds? January 13, 2017

Dothan, Houston
Debt Consolidation: Should You Pay Bills With Your Retirement Funds?, Dothan, Alabama

Many people assume that bankruptcy protection is only for those who have exhausted all other options, including cleaning out all of their retirement accounts. Unfortunately, this puts many borrowers in a precarious situation, causing them to essentially rob their future selves to pay off their short-term obligations. The Gil Law Firm, one of Dothan's most respected bankruptcy and debt consolidation law offices, recommends contacting a lawyer who will help determine the best time to file.

Debt Consolidation Attorneys Answer FAQs About Paying Bills With Retirement Funds

Shouldn't I Use All My Available Resources Before Filing For Bankruptcy?

In short, no, you should not drain your accounts and resources before seeking bankruptcy protection. Bankruptcy is intended to give you a fresh start at life, which becomes increasingly difficult without retirement funds. In fact, because of the power of compound interest, you could be spending much, much more than it appears. In 20 years, just $10,000 could have doubled or tripled, which means you're taking that much more from your future self.

Won't I Lose My Retirement Funds Anyway?

debt consolidationWhile a Chapter 7 bankruptcy typically does allow the trustee to seize a variety of assets, retirement funds contained in a 401(k) or IRA account are typically exempt. On the other hand, a Chapter 13 bankruptcy doesn't require you to give up any of your assets at all. In almost every case, you'll be able to walk away from your bankruptcy with your retirement funds intact.

Will My Retirement Savings Prevent Me From Filing For Bankruptcy?

Before a Chapter 7 petition can be approved, you'll have to pass a means test, providing that you're unable to pay off your outstanding debts. However, most retirement savings accounts are exempt from consideration, and a Chapter 13 bankruptcy doesn't include a means test at all.

Before filing for bankruptcy, you need the help of a skilled debt consolidation attorney who will help you get the full benefit of your petition. Learn more about The Gil Law Firm’s services online, or call (334) 673-0100 for a consultation.

Other Announcements, Events and Deals from The Gil Law Firm
How to Talk to the Claims Adjuster After a Car Accident Injury, Dothan, Alabama
If you were hurt in a car accident that wasn't your fault, you may have grounds for a personal injury claim. Since insurance adjusters are trained to find even the smallest reason& more
What’s the Difference Between SSI & SSDI?, Dothan, Alabama
For individuals living with a disability, receiving financial benefits through applicable programs can make all the difference in maintaining a good quality of life. The Social more
What Does a Bankruptcy Trustee Do?, Dothan, Alabama
Individuals who file Chapter 7 or Chapter 13 bankruptcy are expected to cooperate with their assigned trustees. This person oversees and represents the estate in question, so more
What Mental Impairments Qualify for SSDI Benefits?, Dothan, Alabama
The Social Security Administration awards disability insurance benefits to individuals suffering from mental disorders as well as physical disabilities. In both cases, more
How to Build a Strong Slip & Fall Case, Dothan, Alabama
If you were recently involved in a slip-and-fall accident, you might be interested in filing a personal injury claim. The law protects victims in these cases, but before you more