Should I use my 401k to avoid bankruptcy? 4 Answers as of October 19, 2010

I have been behind on mortgage and credit card payments for several months. I am a single person with no family members who can help me with money problems. I have heard that you can borrow money from your retirement to help pay bills. Is it better to avoid filing for bankruptcy or to keep the money in my 401k?

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Builders Law Group
Builders Law Group | Nick Campbell
aking money out of your 401K, which is generally exempt from the bankruptcy estate is a terrible idea.
Answer Applies to: California
Replied: 10/19/2010
Greifendorff Law Offices, PC
Greifendorff Law Offices, PC | Christine Wilton
Never! Your retirement account is for RETIREMENT! Cashing in or borrowing from your retirement, robs YOU of the compound interest you would have earned and leaves you with nothing for your golden years!
Answer Applies to: California
Replied: 10/19/2010
The Law Office of Mark J. Markus
The Law Office of Mark J. Markus | Mark Markus
That is a question that can only be answered after a comprehensive consultation with both a bankruptcy attorney and your accountant. There are significant tax consequences to using 401k money prior to retirement age, and you need to weigh all the costs and benefits of each option and see what's best in your situation. There is no one yes or no answer.
Answer Applies to: California
Replied: 10/18/2010
Diefer Law Group, P.C.
Diefer Law Group, P.C. | Abel Fernandez
I do not recommend that you do that; it is not a good idea.
Answer Applies to: California
Replied: 10/18/2010
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