When you get behind in your debt, by either losing your job, cut back in hours or significant unexpected expenses, you may worry about losing your retirement account to your creditors.
Cashing in Your Account
One option you may think of is cashing in your retirement account to catch up on your debt. If you are just starting out in your working life, this may not be too bad of an option. You will have several more years to build up your retirement account. If, however, you do not have many more years left to work, cashing in your account could be disastrous to your retired life and being able to pay your living expenses when you can no longer work.
By filing bankruptcy you will be able to eliminate your debt and keep your retirement account. Cashing it in to pay credit cards or medical bills is rarely a good idea.
You may worry that if you file bankruptcy, the court will seize your retirement account to pay your debt. This does not happen due to the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, stipulating that many retirement accounts are exempt assets in bankruptcy. If you have over one million in your account, this may not be exempt and you will want the advice of a bankruptcy lawyer.
Your retirement funds are safe from being used to satisfy creditors’ demands. Speak to an experienced McAllen bankruptcy attorney to be sure your retirement assets will be safe from liquidation and how you can get relief from your debt.