It is not a good idea to use the funds that you collected over time in your retirement account to pay off your debt, no matter how dire your situation may be. There are several reasons why this is so. When collection agents are calling and sending letters in the mail on a regular basis, it is natural to feel overwhelmed. You may feel like you have to raid any funds that you have available to pay them so they will just leave you alone. If you are considering using the hard-earned money that you have been acquiring over the years in your retirement account, refrain from doing so.
Not being able to pay your debts and having financial issues is an extremely difficult situation to be in. It is stressful, it causes excess anxiety, and it makes you question a bleak future. An Indiana bankruptcy situation is not ideal for anyone. However, before you make rash decisions that could negatively impact you for the long-term, call Christopher L. Arrington, a Danville bankruptcy attorney. Learn more about your options and what strategies will best address your situation so you can achieve the most favorable outcome possible.
What are the Implications of Using Your Retirement Funds to Pay Off Debt?
Removing funds from your IRA or your 401k can have far-reaching implications and only add to your financial woes. For example, you may incur tax penalties and various other fees from taking money from these accounts that you did not expect. This could reduce the amount of money you have in these accounts to use toward paying off your debts. Ultimately, taking money from your retirement accounts could be so costly that not only will you have difficulty getting rid of your debts, but you will end up incurring more debt in the long-term.
After years of responsibly putting money away for your future, a quick emotional decision to take your stockpiles out means that you have just eliminated your nest egg. As you age, you are limited in the amount of time you have to replenish these funds and to build up the money you need to be able to retire. In this situation, your whole plan for the rest of your life will have to change, and you may have to work for longer than you wanted and at an older age than you expected because you have to make up for those losses.
Did you know that the money in your retirement accounts is often protected when you are in an Indiana bankruptcy situation? If you are considering bankruptcy in Danville, Indiana, it is best you not make any quick decisions until you speak with Christopher L. Arrington. You may be able to keep your retirement funds while also moving forward with an Indiana bankruptcy proceeding. You can actually start fresh with your full savings account for the future.
Contact an Indiana Bankruptcy Attorney Today
Christopher L. Arrington is an Indiana bankruptcy lawyer who can advise you on the best plan for maximizing your money as well as provide you with the most fitting options to get out of debt. You can schedule your free consultation with Christopher L. Arrington at (317) 745-4494.