Bankruptcy

One Indication That You Need To Visit with a Board Certified Arizona Bankruptcy Lawyer. Or Not, I Guess. Your Choice! But Stop with the 401(k) Use!!!

By Joseph McDaniel, Esq.

Quit burning through your 401(k) and then saying, "Gee, I guess it's time to talk to a bankruptcy lawyer in Arizona, now that I have absolutely no resources to cushion my fall!"

I'll write more about this when I get A Round Tuit, because this one drives me crazier than most of the other ways people make mistakes.

And there are three reasons it bothers me: one is that your use of the 401(k) will give rise to tax consequences, and 2) another is that the dough you are sucking out of the 401(k) to make credit card payments COUNTS IN THE MEANS TEST, and 3)you could have kept the 401(k) when you filed, assuming you didn't just dump twenty thou into it immediately prior to filing.

Now, the reason I would much prefer it if you didn't flush your 401(k) down the drain involves how much you're going to suffer in your bankruptcy case in Arizona.

And if you have a 401(k) on the sidelines, then when a speed bump comes up you'll be able to cushion it. If there's a small preference to mom, you can pay it so mom isn't sued by the bankruptcy trustee.

If there's a small credit card use prior to filing, no problem, again.

If there's any other little bitty issue, you can work around it using the 401(k) as your bank.

And then you will suffer less in your bankruptcy; and in my book, more suffering bad, less suffering good.

Capish?

NOTHING HERE CONSTITUTES LEGAL ADVICE RE A CHAPTER 7, CHAPTER 13, CHAPTER 11, OR CHAPTER 12. FIND AN ARIZONA BANKRUPTCY LAWYER WHO IS BOARD CERTIFIED IN BANKRUPTCY LAW, AV RATED, AVVO 10 RATED, ON SUPERLAWYERS, OR JUST VERY EXPERIENCED AND A FORMER CHAIR OF SOME BANKRUPTCY SECTION OR COMMITTEE. NOTHING HERE MAY BE USED AS LEGAL ADVICE IN CONNECTION WITH ANY BANKRUPTCY, WHETHER THAT BANKRUPTCY IS IN PHOENIX, GLENDALE, TEMPE, MESA, SCOTTSDALE, OR ANYWHERE ELSE.

Full post as published by Arizona Bankruptcy Attorney Blog on July 20, 2010 (boomark / email).