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Minneapolis Debt Relief Attorneys

Liquidating or Borrowing From an IRA or Pension

Many people who are facing financial uncertainty look to their savings and even retirement savings, IRAs and pensions. Almost any financial adviser would probably tell an individual considering this option to look elsewhere. Liquidating or borrowing from an IRA or pension should only be a very last resort.

More Than Three Decades of Serving Minnesota Bankruptcy Clients

At Prescott & Pearson, our Minnesota bankruptcy lawyers have focused solely on helping Minnesota families and small businesses get a fresh start through the bankruptcy process. Since 1975 our Twin Cities bankruptcy law firm has been providing quality and effective bankruptcy representation. Let us help you find the right bankruptcy solution for you. In some cases, bankruptcy may not be the right option. There are many other possible solutions, and we will find the right and catered option for you.

For more information about bankruptcy and other tips on what not to do, please contact us online today.

Borrowing From 401(k) Accounts to Pay Debts

Many clients come to us asking whether liquidating their IRA and pension or borrowing from their pension to pay debt is a good option. This is often not a sound decision. In almost all cases, we strongly advise our clients to consider other options, such as bankruptcy and debt negotiation.

Borrowing money from a 401(k) fund often creates its own budget problem and must be paid back through withholdings from your paycheck. If it has not paid off all of the debt, it often simply becomes another large monthly payment problem.

In addition, 401(k) loans are not dischargeable debt in a Chapter 7 or Chapter 13 bankruptcy case. That debt will continue to be owed after filing

Borrowing From Retirement Savings to Pay Debt

Withdrawing funds from retirement savings (be it a 401(k), Roth IRA or Traditional IRA) often creates not only a tax penalty, but also taxable income. You can generally assume you will get about 60 percent of the funds actually borrowed after paying tax and penalties.

You need to retire one day. When that day comes (usually sooner than later as you had enough funds to borrow or take from your retirement funds), you have compromised your retirement to possibly satisfy some creditors. We are consulted by numerous clients who have compromised their retirement, but have not satisfied their creditors, and still need to file for bankruptcy. That is why if you are considering tapping into your retirement accounts, it is important to consult with one of our experienced attorneys as soon as possible.

'This Is All We Do and We Do It Well.'

Minneapolis-St. Paul: 651-968-8096 / Statewide Toll-Free: 888-366-0827

For answers to any other questions about bankruptcy and taxes — don't hesitate to call or contact our Minneapolis debt relief attorneys in the Twin Cities area for a free consultation.

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Prescott & Pearson Minneapolis MN Bankruptcy Attorneys

http://www.prescottpearson.com 888-366-0827 Prescott & Pearson in Minneapolis is still the busiest, most experienced bankruptcy attorneys in Minnesota. If you're considering bankruptcy, stop worrying and contact us.

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