Alternatives to Bankruptcy: A Second Mortgage or Retirement Funds

Wasting retirement funding or putting a home at risk in order to avoid bankruptcy is an all too common occurrence and something you want to avoid at all costs. If you are having major financial problems, it is important to know that you have other viable options.


With an Oneonta bankruptcy lawyer, all of your retirement funds can be protected. Using retirement funds to pay off creditors will result in a significant tax penalty. In addition, you could ultimately owe taxes that cannot be discharged in a bankruptcy.


Obviously, retirement funds are just that, monies set aside for older age so you can buy groceries, pay utilities, afford a mortgage or rent, and get proper healthcare. Those funds should stretch at least 20 years, so the more you save, the better.


An Oneonta bankruptcy attorney has the knowledge and experience to ensure your home’s equity is protected up to $75,000 for a single person or $150,000 for a couple. To determine the amount of equity in your home, the mortgage or mortgages are deducted from property’s value. For instance, if you have a $200,000 mortgage on a $250,000 home, there is $50,000 in equity. By working with a qualified Oneonta bankruptcy lawyer, that money can be completely protected.


While getting a second mortgage to pay off debt may seem like a good idea at the time, it actually creates more risk. In fact, having a second mortgage can make an already bad financial situation worse if you ultimately file bankruptcy. The reason you need to work with an experienced Oneonta bankruptcy attorney is that while unsecured debt can be discharged in a bankruptcy, secured debt, including mortgages, cannot.


To protect your retirement funds and avoid using the equity in your home to get out of debt, you need someone to advocate for your best interests.


Call Harris-Courage & Grady Solutions today and get back on the path to financial security.

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