Struggling with debt can be a debilitating issue. Debt, which comes in many forms, can create quite a bit of stress and put you in a hole that you might never be able to climb out of no matter how hard you try. There are plenty of options for getting out of debt, one of which is to liquidate your assets in Chapter 7 Bankruptcy. Today, we will discuss how liquidation can help you start to pay down your debt.
The main goal of liquidating assets in an effort to pay down debt is not just to pay down the debt, but to create some sort of monthly cash flow once again. Cash flow is an important part of life and living on a budget. You need cash flow in order to make a budget work. You need to take a long look at your debt, your current income and your finances as a whole before deciding whether or not liquidating assets will work for your situation.
Some things to consider before liquidating assets to pay down debt include the following:
- Will cashing a large amount of assets move you to a different tax bracket?
- Are you willing to leave dependents unprotected if you cash in your life insurance policy to pay the debt?
- You might have to pay surrender charges if you cash in a life insurance policy.
- You could face tax penalties if you withdraw from your 401(k) prior to the age of eligibility.
Struggling with unbearable debt in Nashua? Turn to a trusted Chapter 7 Bankruptcy attorney who can answer all of your questions and guide you in the right direction.
Source: Bankrate, "How far should you go to pay off debt?," Kerri Fivecoat-Campbell, accessed Aug. 30, 2017