Alternatives to Bankruptcy- Using Retirement Funds Or Getting A 2nd Mortgage

Using Retirement Funds Or Getting A 2nd Mortgage

I am always saddened to hear that someone has wasted their retirement or put their home at risk when they could have protected these assets in a bankruptcy. Please do not use either of these methods.

We can protect ALL of the value of your retirement in a bankruptcy. If you use your retirement funds to pay debts, you will get hit with a huge tax penalty and may end up owing taxes. These taxes are non-dischargeable in bankruptcy. Also, you will need your retirement for food, shelter and medical care as you age. Your retirement may need to last 20 years or more. You can’t have too much saved for your retirement.

We can also protect your home equity up to $75,000 for an individual or $150,000 for a couple. The equity of your home is calculated by taking the value of the home and subtracting the mortgage(s); the difference is the equity. As an example, if your home is worth $250,000 and you have a mortgage for $150,000, you have $100,000 in equity. This would be fully protected in a bankruptcy if owned by a couple.

Having a second mortgage puts your home at greater risk and may worsen your financial situation if you need to file for bankruptcy. Some people get a second mortgage to pay credit card or other unsecured debts. This is a bad idea. Unsecured debts are dischargeable in a bankruptcy, but secured debts such as a mortgage are not.

Save your retirement and your equity in your home. Call us today and schedule your appointment.


Recent Posts

 -

The credit counselors’ primary source of income comes from creditors, mostly credit card creditors. Ask the credit counselors if they ...
Learn More

 -

In the mid-1980’s, farmers throughout the United States faced seemingly insurmountable credit problems. Struggling family farmers were seeing their property ...
Learn More