The year 2012 is finally here and it is time to make new year’s resolutions.
For some, filing bankruptcy is a great resolution. The new year is a good time to get rid of that nasty debt that is hanging over your head and won’t go away by itself.
Some people think that the world is going to end this year because of ancient predictions. Others think that our financial worlds will crash this year. I’m an optimist. I don’t believe the world is going to end and I think things are going to get better.
For some, the first step to a better financial life is filing bankruptcy. The truth is that most people don’t want to file bankruptcy even when every reasonable indicator says they should. Most people do everything they can to try to avoid it.
The number one mistake I see people make trying to avoid bankruptcy is withdrawing everything from their 401k retirement plan and using the money to pay off debts that could have been eliminated in a bankruptcy. Not only do they lose their retirement but now they have a large tax bill from the Internal Revenue Service because of the early withdrawal penalty.
Most people don’t know that their 401k retirement plans are protected from creditors. Most people expect to lose their 401ks when they file bankruptcy. The truth is that you get to keep all of your 401k retirement.
Other people choose to ignore their debt problems. Their phone rings constantly but they just don’t answer it. Their mailbox gets filled with collection letters but they just don’t open them. The Sheriff serves a collection lawsuit on them but they pretend that it never happened.
Ignoring the reality of debt can be extremely painful in Georgia.
Once a creditor obtains a judgment against you, they can use it to garnish 25 percent of your net paycheck. Can you imagine getting a paycheck that has an unexpected twenty five percent bite out of it?
The most painful consequence of ignoring creditors is when they use the judgment to garnish all of the money in your checking account.
If you are struggling with debt problems, why not avoid the nightmare scenarios and meet with a bankruptcy attorney to see if it is time for you to get a new financial start?