When debt begins to pile up, it can feel like the walls are closing in financially. With this added pressure, it can often be hard to determine what the best course of action can be.
Should you drain 401(k), IRA, or other retirement accounts?
Do you have to have all the documentation needed to file a bankruptcy immediately upon contacting an attorney?
First, and possibly most importantly, you do not have to drain your retirement accounts in order to file a bankruptcy. By the time many clients come to speak with us here at Martin L. Rogalski, P.C., they have drained their retirement accounts to attempt to pay-down some of the debt they owe.
If the tax consequences of doing so were not enough, most clients are even more devastated to know that we could have protected most, if not all of the money they withdrew.
Currently federal bankruptcy law allows Debtors to exempt “Retirement funds to the extent that those funds are in a fund or account that is exempt from taxation under section 401, 403, 408, 408A, 414, 457, or 501(a)…” according to 11 U.S. Code § 522(d)(12).
As a result, we often recommend to clients that if bankruptcy is something they are considering, they do not withdraw funds from these accounts to pay creditors. Bankruptcy can address those debts while allowing these hard-earned accounts to stay in the possession of the Debtor.
Further, clients do not have to have all the documentation necessary to meet with our office to determine if a bankruptcy can benefit them and their situation.
To determine if or what kind of bankruptcy can be most beneficial our office only needs:
- a list of the debts owed
- rough idea of a monthly budget
- income documentation
While filing a bankruptcy does require a lot of paperwork and documentation, most recommendations can be made while reviewing less documentation than one would initially expect.
Clients should come to speak with us at Martin L. Rogalski, P.C. before making any decisions financially. Our office has the expertise needed to properly advise each client on the ways a bankruptcy can help alleviate some of the financial pressures they may be experiencing.
If a bankruptcy is something you have been considering, Martin L. Rogalski, P.C. has handled numerous bankruptcies with a variety of variables and issues. Our trained staff is ready to answer more questions and guide you through. Contact Us Today!
