Boston Bankruptcy Attorney – Don’t Use Your Retirement Savings to Pay Credit Card Bills!

February 11, 2010

By Bankruptcy Attorney Kara O’Donnell

www.QuincyLegal.com

Quite often by the time a client comes to me to file bankruptcy he has already had months of being unable to meet the credit card minimum payments and is desperately in need of help.  However, many of these clients have used up assets to make these minimum payments even though a) those assets WOULD HAVE BEEN PROTECTED in a bankruptcy, and b) continuing to make minimum-only payments will get you nowhere in the long run.

There are some classes of assets that receive automatic protection in a Chapter 7 bankruptcy:  Retirement accounts, monies obtained from personal injury settlements, monies received from workers’ compensation accidents, alimony, child support, some life insurance policies, and veterans’ benefits.  In short, NONE of these types of funds should be depleted in efforts to make credit card payments.  WHY?  Because if you can’t afford the payments this month what makes you think you will be able to afford them in the near future?  And, once those assets are gone, you will have no emergency funds to continue making the minimum payments.  The end result will be that you will end up filing for bankruptcy anyway AND your emergency funds will be gone.  Not the best outcome.

A better outcome?  If you are having trouble meeting your credit card minimum payments consult with a bankruptcy attorney TODAY.  Most attorneys, including myself, offer a free consultation for bankruptcy clients and, by doing so, you can create a financial plan for your future which involves both 1) the fresh start that bankruptcy provides and 2) still keeping your retirement accounts or other protected funds outlined above.

The key to your bankruptcy filing? Filing sooner and not later.

Kara O’Donnell, Esq.
O’DONNELL LAW OFFICES (857)526-1355
Quincy, Massachusetts
http://www.QuincyLegal.com
Help@QuincyLegal.com

Posted by Kara O’Donnell

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