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

Covid-19 Tax Tips

The COVID-19 pandemic has affected a variety of things including taxes. These COVID tax tips can help you prepare and...
Read More

How Can a Bankruptcy Attorney in Tampa Florida Help Me If I Fall Behind on My Mortgage After Filing for Bankruptcy?

Many people find that filing for bankruptcy provides all of the financial relief they need to get back on track....
Read More

Are Bankruptcy Laws Designed to “Trip” You Up? Here’s How a Bankruptcy Law Firm Can Help You Avoid Trouble

It’s no surprise that people are skeptical of how bankruptcy can help their financial situation. Many have heard stories about...
Read More

What is a Discharge and What Does It Stop?

The primary benefit of bankruptcy is the discharge. Filing for Chapter 7 bankruptcy results in the elimination of your legal...
Read More

How This Important Bankruptcy Law Stops Creditors in Their Tracks

One of the greatest benefits of filing for bankruptcy is the automatic stay. The automatic stay is a court order...
Read More

Secret Bankruptcy Laws Make Asset Protection Possible Under Florida Bankruptcy Law

One of the major concerns people have when filing for bankruptcy is whether or not they will lose their assets....
Read More

What Happens If You’re Accused of Bankruptcy Fraud?

If you’re an honest person, the idea of being accused of fraud might seem ridiculous to you. But if you’re...
Read More

Why You Need an Attorney to Help You Understand Bankruptcy Law

The legal system is complex. Even the simplest legal issue can develop into something complicated without the right guidance. Filing...
Read More

Is There Life After Bankruptcy? 5 Ways Your Lifestyle Will Change After You File

One of the main reasons people put off filing for bankruptcy is because they are concerned about how it will...
Read More

How Teaching Your Child Money Management Helps Them Avoid Needing Bankruptcy in Florida as an Adult

If you’re like most parents, one of your primary concerns is teaching your kids good money management. Many of the...
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 RG Seal

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