Bankruptcy And Retirement Funds in Ohio

A question many people struggling with debt ask is: Should I borrow from my retirement savings to pay off creditors? If you are considering filing for bankruptcy, the answer is almost certainly no, for a number of reasons.

Most importantly, retirement accounts, such as IRAs and 401(k)s, are exempt property in bankruptcy, meaning they cannot be seized by the bankruptcy trustee and used to pay off your creditors. If you borrow money from your retirement savings to pay creditors and go on to file for bankruptcy, you will still owe that money to your retirement account. If you leave your retirement account untouched, your debts to other creditors can be discharged in bankruptcy. In most cases, using retirement money to pay creditors is not in your best interest financially.

In addition, there may be significant interest and penalties that occur due to an early withdrawal of your retirement savings. If you are under the age of 59 1/2 and lose your job for any reason, you will be required to pay your loan off in a short period of time, and face additional liabilities in penalties and increased interest.

Contact Our Cincinnati And Colerain Bankruptcy Attorneys

If you have questions about bankruptcy and borrowing from retirement savings accounts, our attorneys are here for you. Contact us today online or by telephone at 513-729-7196 to arrange a consultation with an experienced Cincinnati, Ohio, bankruptcy lawyer.

We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.