Your 401(k) and the new bankruptcy law

New Bankruptcy Law Secrets

401(k) Retirement Funds and Bankruptcy

Here is yet another financial tactic that is very damaging to your long term interests.

When you're sinking in debt you will grab at any cash you get your hands on. But tapping into your personal 401(k) retirement funds is a VERY bad idea.

First you'll have to pay those penalties. Between the penalties and the taxes anywhere from 35-40% of your money will vanish the moment you withdraw it.

Next you lose the much larger sum you'll need when you retire years from now. If you withdraw 10 thousand, that money would have grown to 15,000 or more in the years ahead. In reality you're losing much more money down the road.

And if you're using your 401(k) funds to pay off an unsecured debt like a credit card balance, you're sacrificing your financial future when you might have been able to wipe away your unsecured debts through a chapter 7 bankruptcy.

Unless you're highly motivated to protecting an asset such as your home, leave your 401(k) retirement funds alone.

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