CALL NOW!
FREE PHONE/VIRTUAL CONSULTATION

Don’t Jump to a Credit Card Debt Relief Decision in Florida, II

A warning about credit card debt relief options was the focus of our prior post. It wasn’t a warning against finding a solution, but instead it warned about jumping into a decision before truly understand the benefits and consequences associated with that decision and other options. We used withdrawing from 401(k) as an example, the first post focusing on the current costs associated with this option.

In our prior post, we determined that an individual in the 25 percent tax bracket could have to withdraw approximately $15,000 from a 401(k) to pay off a $10,000 credit card debt. However, this is only a present-day snapshot. Looking down the road, that money may actually cost $60,000. How?

The money in a 401(k) continues to earn interest. For a person who would have left it there for another 14 years, the average 5 percent interest rate would have increased the future value to that $60,000 mentioned above. Again, for some there may be sufficient funds there to make this a viable option.

Borrowing from a 401(k) is another option that helps avoid the tax issue, but there are often serious restrictions. For example, the loan may become due should an employee choose to leave their job. Getting laid off could also cause the same result.

This is only one example, but it illustrates the need to research options first. What is right for one situation is not always the best choice under other circumstances. This is where a bankruptcy attorney can provide advice based on research and experience on the widest variety of possible solutions tailored to a case-by-case basis.

Source: Fox Business, “Withdrawing vs. Borrowing From 401(k) to Pay Credit Card Debt,” Gary Foreman, April 29, 2013

Archive

Video Testimonials

Tampa Bankruptcy Law Blog

10 Signs You Should File for Bankruptcy

When it comes to your finances, there may come a time when you feel like bankruptcy is the only way...
Read More

What Do You Need to Know Before Filing for Bankruptcy? A Chapter 7 Bankruptcy Attorney in Florida Can Help You During this Time

What happens during the time leading up to filing for Chapter 7 bankruptcy? A Chapter 7 bankruptcy attorney in Florida...
Read More

What Does It Mean to Declare Bankruptcy?

What does it mean to "declare" bankruptcy? Your bankruptcy law attorney will help you through the process. Declaring bankruptcy is...
Read More

Student Loan Forbearance Ends April 30th. Here’s What You Need to Know

The federal government extended forbearance of repayment of student loans during the COVID-19 crisis. This forbearance was due to end...
Read More

Is Better Money Management on Your List of Resolutions for 2022?

If you’re like most Americans, improving your financial situation is on your list of New Year’s resolutions for 2022. Whether...
Read More

3 Reasons to Send Your Bankruptcy Attorney in Tampa Florida a Christmas Card

Have you begun making your Christmas card list yet? Did you include your bankruptcy attorney in Tampa, Florida? It seems...
Read More

What Was the Biggest Money Management and Bankruptcy News of 2021?

Like most years, bankruptcy was a topic that arose in the news many times throughout 2021. Topics related to money...
Read More

3 Best Bankruptcy Tips of 2021

Learning how to manage your money is an ongoing process. Even the smartest money minds out there can always learn...
Read More

How to Prevent Bankruptcy from Ruining Your Holiday Season: Why a Spending Spree Before Bankruptcy Could Hurt You in the New Year

Should you go on a spending spree before bankruptcy to celebrate the holiday season? The answer might surprise you. The...
Read More

How to Avoid Holiday Overspending

The holidays are upon us and, as usual, many people are trying to keep their spending within a budget. As...
Read More

Bankruptcy

For The Next 5 Days GET A FREE BOOK About Bankruptcy

Learn More

Infographics

We are A Debt Relief Agency.
We help people file for bankruptcy under the Bankruptcy Code

Pay Online Bankruptcy Courses Newsletter Subscription

NACBA Logo avvo1 avvo2 avvo3 LEA BBB Logo

Call For A Free Initial Consultation

813.254.5696

Tampa Office

Law Offices of Robert M. Geller, P.A.
807 West Azeele Street
Tampa, FL 33606
T: (813) 254-5696
T: (800) 853-7549
F: (813) 253-3405

Map And Directions

St. Petersburg Office

Law Offices of Robert M. Geller, P.A.
125 5th Street South
(Wells Fargo Financial Center)
2nd Floor, Suite G
St. Petersburg, FL 33701
T: (727) 532-3939

Map And Directions

Pasco Office

23526 State Road 54
Lutz, FL 33559
T: (813) 336-2320

Map And Directions