Watch this #shorts video before you cash out your #401k or #retirement account to pay your #debts if you are considering filing #bankruptcy from a #bankruptcylawyer

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ABOUT SCOTT

Scott Allums started his bankruptcy and consumer protection law firm in 2001. A fully licensed bankruptcy attorney, he has extensive experience helping businesses, individuals and families seeking debt relief. Scott will help you put an end to abusive collection phone calls, help you enforce your bankruptcy discharge, and put you on track to obtain a fresh start.

The majority of his practice focuses on:

Bankruptcy Law
Chapter 7 Bankruptcy
Chapter 13 Bankruptcy
Debtors Court
RESPA violations
Mortgage Litigation
Loan Modifications
Bankruptcy Discharge Violations
Fair Debt Collection Practices Act (FDCPA)
Fair Credit Reporting Act (FCRA)
Abusive Collection Phone Calls
Debt Collectors illegally contacting your family members, neighbors or friends
Defending Collection Lawsuits
Judgments
Avoiding Liens in Bankruptcy
Tax Debt
Student Loans
Stopping Foreclosures
Stopping Repossessions
Stopping Garnishments

Allums Welsch, PC serves clients throughout Jefferson, Tuscaloosa, Shelby, Bibb, Blount, Walker, Marion, Lamar, Fayette, Winston, Pickens, Greene, and Sumter counties, including Birmingham. Contact the firm’s Bessemer or Tuscaloosa office at 205.426.7080 for a free initial consultation.

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We are a debt relief agency. We help people file for Bankruptcy under the Bankruptcy Code. No representation is made that the quality of the legal services to be performed is greater than the quality of legal services performed by other lawyers. Attorney Advertising. This video is designed for general information only. The information presented in this video should not be construed to be formal legal advice nor the formation of a lawyer/client relationship….(read more)

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Cashing out your 401K or retirement account before filing for bankruptcy may seem like a quick fix to financial problems, but it could actually cause more harm in the long run. While bankruptcy is designed to provide relief for individuals facing overwhelming debt, draining your retirement savings can lead to serious consequences.

First and foremost, early withdrawal from a 401K or retirement account typically comes with hefty penalties and taxes. These penalties can eat away at a significant portion of your savings, leaving you with even less to work with when trying to rebuild your financial stability after bankruptcy.

Additionally, retirement accounts are often protected from creditors during bankruptcy proceedings. This means that by cashing out your retirement savings before filing for bankruptcy, you may be exposing those funds to potential seizure by creditors. On the other hand, if you leave your retirement savings untouched and file for bankruptcy, you may be able to keep those funds intact.

Furthermore, cashing out your retirement savings early can have long-term implications on your financial future. Retirement accounts are designed to provide income during your golden years, and by depleting those funds prematurely, you may be jeopardizing your ability to support yourself in retirement.

In some cases, individuals may be tempted to cash out their retirement savings to pay off debts before filing for bankruptcy. However, it’s important to note that many types of debts, such as credit card debts and medical bills, can often be discharged through bankruptcy without the need to tap into your retirement funds.

It’s crucial to consult with a qualified bankruptcy attorney or financial advisor before making any decisions regarding your retirement savings and bankruptcy. These professionals can provide valuable guidance on how to navigate the bankruptcy process while protecting your long-term financial security.

In conclusion, cashing out your 401K or retirement account before filing for bankruptcy could cause more harm than good. By leaving your retirement savings untouched and seeking professional guidance, you can better position yourself for a more stable financial future even after bankruptcy.