Bankruptcy & Retirement
If you’re stuck in debt, the last thing you need is to worry about retirement. Your foremost concern should be getting out of debt so you can have a clean financial slate.
However, it’s important to be aware of the interplay between bankruptcy and retirement — whether you’re nearing retirement, already in retirement or simply have retirement accounts.
Have Retirement Assets? Don’t Make This Mistake.
For many people, retirement accounts, pension plans, 401(k) plans and the like may be the most significant assets they have. When you’re facing pressure from creditors or being sued for debts, it may be tempting to dip into your retirement funds to put those debts behind you.
However, draining your retirement accounts is rarely a good solution. Why not?
- In bankruptcy, you may be able to get rid of the underlying debts entirely. Bankruptcy will also stop any collection lawsuits you’re facing.
- Most retirement assets are protected during bankruptcy. This means creditors can’t touch them.
- Pulling money from your retirement — throwing good money after bad. You will have to pay steep taxes on the amounts you prematurely withdraw from your retirement accounts, and those amounts may not even make a dent in your debts anyway.
For all these reasons, bankruptcy may offer a far better solution.
Filing Bankruptcy In Retirement
In today’s economy, seniors aren’t immune from debt problems. Many face significant financial struggles, especially when it comes to medical expenses. Fortunately, you may be able to file bankruptcy in retirement without jeopardizing your retirement funds or benefits.
We can help. At Wootton & Wootton, P.C., our lawyers understand the interplay between bankruptcy and retirement. To sit down with one of our attorneys during a free consultation, please call at 919-794-8660. We have convenient offices in Durham and Henderson, North Carolina.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.