Financial problems can be a source of immense stress and uncertainty for you and your family. However, it is an unfortunate fact that many people are uninformed about the types of protection offered through bankruptcy, which can make it difficult for them to decide if this is a viable option for their needs. Once you have the following two questions addressed, you will be more informed about whether or not bankruptcy is a suitable solution to your current financial problems.
Can You File Bankruptcy If You Are Being Sued Over Your Debts?
When you fall sufficiently far enough behind on your debts, there is a strong chance that your creditors may sue you in order to compel you to pay. Not surprisingly, being sued in this manner can be very stressful, but many people fail to realize that bankruptcy is still a viable option at this point.
When you file for bankruptcy, any lawsuits that are currently proceeding against you from your creditors will be halted by the courts. In addition to halting lawsuits, filing for this protection will also stop most wage garnishments and other collection actions against you.
Will You Lose Your Retirement Savings?
Some individuals will be hesitant about filing for bankruptcy because they are concerned about having to forfeit their retirement savings. This can be a financially devastating outcome that may make it impossible for you to retire in your later years. Luckily, your retirement savings are exempt from bankruptcy filings. However, this only applies to financial assets that are in accounts specifically designated for retirement, such as IRAs and 401K accounts.
You should avoid attempting to place your assets in the retirement account as a way of protecting the assets from bankruptcy. The courts will closely review your financial activity during these proceedings. If it is found that you were hiding assets in your retirement account to protect them from the bankruptcy filing, the court can reverse these actions or deny your bankruptcy petition.
If you are facing aggressive actions from creditors or find yourself with debts you can never repay, bankruptcy protection may be the best option for escaping this situation. For those that understand that a lawsuit from a creditor will not inhibit your ability to file for protection and that your retirement accounts will be safe, you will be better informed about your options for escaping your current financial problem and getting the fresh start that you desperately need. For more information, speak with experts like Morrison & Murff.