Bankruptcy filing is often associated with discharge of debts and saving your salary from wage garnishment. It is also about protecting your future from any kind of worries and tensions. Though there maybe thousand ways in which bankruptcy can protect your future, one of the best ways is by protecting qualified retirement account from creditor seizure. Below are top 3 ways that you can consider if you want to protect your retirement while filing bankruptcy:
1. Avoid using the retirement collateral for loan: The initial step that you need to take is to avoid using your retirement account as collateral for a loan. This is because using your retirement account as collateral for a loan, will affect in protecting your retirement account while filing bankruptcy.
2. Do not withdraw money from your retirement account: If you withdraw money to pay for debts or living expenses it will be a risky process. Taking out money from your retirement account whenever you feel the need can lead to financial crunch at a point of time. You should be prudent while taking out money from your account as that will be the prime source you need to bank upon. If you borrow from the retirement amount it will be a huge mistake as bankruptcy will not be able to protect the retirement money you have already withdrawn. With bankruptcy your retirement money can be protected only if you have not withdrawn it.
3. Avoid taking out a loan against your retirement account: Taking out a loan against your retirement account to pay your other debts is not a good option. It may be very tempting for debtors who are trying to avoid bankruptcy but this may be risky as it increases your debt. If you borrow from your retirement account to pay for the present loans, it may be an indication that you are in deep trouble.
Considering all these circumstances the best solution would be to get assistance from a bankruptcy attorney of your state. The attorney can guide you with the process and can help you protect your retirement before you opt for a retirement account loan. It is advisable that you know the process of bankruptcy well before you get into any of the proceedings. Your future should be debt free so should be your present and if you are a bit careful this aim can be easily fulfilled.