Don’t Cash in Insurance or Retirement Accounts
In an attempt to stay financially afloat it may seem like taking loans from or cash withdrawals from Life Insurance policies and retirement plans could be a way out of debt. Although, there are several important considerations that should be taken into account before utilizing retirement accounts. Some considerations include the possible tax consequences and penalties of early withdrawals. One of the most significant factors is whether or not early utilization of retirement accounts will actually end the debt problems or just delay filing bankruptcy. It is important to note that most life insurance and retirements accounts are protected in a bankruptcy. Therefore, you can usually keep the cash value of your life insurance and keep your retirement accounts when filing bankruptcy. All too often we see individuals and families come in to file bankruptcy after depleting accounts that they would have been able to keep through the Ohio bankruptcy filing.
Keeping your assets through a bankruptcy
Consumer bankruptcy protection laws allow for retention of certain assets. Additionally, there are multiple Federal and Ohio bankruptcy exemptions which can be utilized to help you keep cash, keep your car, and keep other personal property. The decision to file chapter 7 bankruptcy
or chapter 13 bankruptcy
in Ohio is often impacted by items that clients wish to keep. In addition to Federal bankruptcy exemptions, a few of the Ohio bankruptcy exemptions include:
- Ohio Cash Exemption
- Ohio Wildcard Exemption
- Ohio Exemption for the Earned Income Tax Credit
- Ohio Exemption for the Additional Child Tax Credit
- Ohio Motor Vehicle Exemption
Note: this is just a sample of some of the bankruptcy exemptions available in Ohio. It is important to discuss your situation with an Ohio bankruptcy lawyer to determine what exemptions will apply your specific financial situation.
The Viscous Debt Cycle and your Bankruptcy Attorney
Every day we meet clients who have taken second mortgages or sold off properties, borrowed from friends and family, sold their vehicle, taken payday loans, and numerous other methods that turn out to only delay filing bankruptcy for a few months longer. This may work if there is a pending change to your income or other anticipated windfall, thus impacting your financial situation for the better. However, all too often we see Ohio bankruptcy clients who have exhausted assets that they could have otherwise kept. We recommend taking advantage of the Columbus, Ohio Bankruptcy Attorney FREE Consultation
, even if you are not ready to file bankruptcy today.
It’s important to understand that consumer bankruptcy protection is just that, protection. Therefore, you don’t need to be down to your last dollar when you file for bankruptcy in Columbus, Ohio. Talk with an Ohio bankruptcy attorney today about your specific situation, even if you are not yet ready to file. The bankruptcy lawyer can help plan to leave you in the best financial situation. Whether you end up filing bankruptcy or if bankruptcy is not the best solution for you, your bankruptcy attorney can help you to understand the best path to get out of debt.