Alternatives to Bankruptcy: A Second Mortgage or Retirement Funds

Instead of using the equity in your home or dipping into your retirement account as a way of avoiding bankruptcy, you need to talk to a reputable Rome bankruptcy lawyer. Sadly, far too many people make the wrong choice, believing that bankruptcy should never be considered. In truth, there are times when a bankruptcy is the better choice for dealing with serious financial troubles.

Having a Rome bankruptcy attorney in your corner is the best way to keep retirement funds protected.

After all, this money is supposed to be used for paying utilities, rent or mortgage, medical bills, groceries, and other necessities as you age. By using the funds to pay off debt, you could be hit with a big tax penalty or forced to pay taxes that cannot be discharged in a bankruptcy. The more you can save for retirement, the better, since this money can easily need to last 20 years or longer.

In addition, it is the goal of a your bankruptcy attorney to keep any equity in your home protected. Through bankruptcy, up to $75,000 in equity for a single person or $150,000 for a couple can be secured. The amount of equity you have in the home is calculated by deducting any outstanding mortgage or mortgages from the value of the property. For instance, if your home’s value is $350,000, but you still owe $200,000 to the lender, you have $150,000 in equity.

Often, people take out a second mortgage as a way of getting out of debt, but this is a very dangerous practice. If you do end up filing for bankruptcy, a second mortgage will make an existing financial problem worse.

Remember, your Rome bankruptcy lawyer can get unsecured debt discharged in a bankruptcy but not secured debt, which includes mortgages.

The most important thing you can do for your future and financial stability is to an experienced attorney to help protect both retirement funds and home equity. For assistance, call Harris-Courage & Grady Solutions today at (315) 533-2360.

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