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  4.  » Should I Take Money Out of my Retirement Plan to Pay My Creditors?

Should I Take Money Out of my Retirement Plan to Pay My Creditors?

| Dec 1, 2010 | Chapter 128, Chapter 13 Bankruptcy, Chapter 7, Debt Settlement |

Think long and hard about it before you resort to liquidating your IRA’s or 401K plans to pay creditors. Generally speaking, these assets are protected from collection actions by creditors. Additionally, they are hard to replenish once they’re gone; but most importantly, using retirement savings to pay creditors may create new debt in the form of income taxes and penalties for early withdrawal. You won’t improve your situation by substituting Uncle Sam with your existing creditors.

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