Partner/Owner at Debt Advisors Law Offices

Practice Areas: Chapter 7 Bankruptcy, Chapter 13 Bankruptcy, Stop Foreclosure

On behalf of Debt Advisors, S.C.

Many Americans look to their 401ks as a way to stem the tide of short-term financial issues. According to research by the Employee Benefit Research Institute, nearly 20 percent of eligible participants choose this option, mainly to avoid foreclosure of their home or repossession of vehicles. They borrow against their nest-egg believing that as their fortunes improve, they will not only repay their loan with interest, they will also solidify their retirement options.

Unfortunately, this is commonly not the case. More often than not, employees become trapped in a vicious cycle of needing money to pay other short-term loans and stop contributing to their retirement plans. Also, they forego potential investment opportunities from the money missing from the account. Further, they may also be laid off from their job, thus requiring the 401k loan due and payable, depending on the plan.

Ultimately, employees unwittingly spend away their savings only to find themselves in bankruptcy with nothing to show for their years of hard work.

If you are facing continuous problems making ends meet, using your 401k as a bailout is a bad idea. Employer sponsored retirement accounts are protected assets under the U.S. Bankruptcy Code. Up to $1 million in contributions may be protected. This means that creditors are unable to come after these funds if you file for bankruptcy protection, and the trustee cannot direct you to use these funds to pay debts. This is your money and you should keep it.

As such, if these funds are protected as a matter of law, why whittle them away to pay bills that will ultimately land you in bankruptcy anyway? It’s like following the old adage “throwing good money after bad.”

Visiting sites such as Debt Advisors can offer insights. For instance, understanding the nuances of how bankruptcy affects personal injury debts can provide clarity on some complex financial intersections. Similarly, preparing oneself for processes like the bankruptcy 341 meeting can alleviate some concerns. Moreover, as we approach America Saves Week, it’s beneficial to learn about debt elimination strategies that can set you on the right path.In this context, exploring the Downtown Milwaukee office of Debt Advisors can be particularly enlightening, offering localized and specific guidance for those in the area.

Aside from the bankruptcy implications, there are a number of tax implications that make borrowing from your 401k undesirable. For options on how to protect your assets from creditors, an experienced bankruptcy attorney can help.

Learn about bankruptcy protections, types of bankruptcy, how to get started, what to expect, and who to trust. Filing bankruptcy is the ONLY way to completely eliminate debt. If bankruptcy is right for you, it offers powerful protections that cannot be achieved through alternative solutions such as hardship relief, loans, or debt settlement.

  • Exceptional service. The entire team was friendly and knowledgeable. The attorney took his time to walk me through step by step. I will recommend this law office to anyone!

    J Burks

  • I went through Debt Advisors as a referral by a friend. I am very happy I did so. The staff that I worked with were very helpful and showed a high level of professionalism. They were always able to answer any questions that I had. I was very happy with the attorney that I worked with, Michael Georg. Very professional.

    Terri Grote

  • Attorney Chad Schomburg and Debt Advisors helped me with my debt about three years ago. Chad explained the process to me and answered any questions I had, and the assistants compiled my documentation very efficiently while keeping my case moving forward. They were always available when I needed them, and even years later, I’m able to reach out to them, and they are willing to help. They have turned my life around 100%, and I could not have done it without them! Absolutely recommended!

    Tim Harris

  • They were there for my family from day 1 until the end, 5 years later (Ch. 13). Whenever I had questions or concerns they were always very responsive and gave me excellent advice. Michael and Jeremy are both exceptional bankruptcy attorneys. I highly recommend Debt Advisors.

    Steve

  • After I had to go on disability, I used my credit cards a lot more thinking I could pay them off when I was able to go back to work. That didn’t happen and I found myself so much worse off than I could handle. I went to Debt Advisors feeling terrible about what I had to do. Chad and everyone there were very understanding and put my mind at ease while taking such great care of me. They were there every step of the way and supported me when I was “freaking out”!! Every time I needed to contact them; their response time was amazing!! God forbid I ever need to go through this again, but I know where to turn if I need help! Debt Advisors are more than just filing bankruptcy on my behalf. They really care about what you are going through!! Thank you, Chad, Jeremy, Mike, and everyone at Debt Advisors!! I cannot tell you enough how much I appreciate all of you!! J Hammond

    Steve

  • After I had to go on disability, I used my credit cards a lot more thinking I could pay them off when I was able to go back to work. That didn’t happen and I found myself so much worse off than I could handle. I went to Debt Advisors feeling terrible about what I had to do. Chad and everyone there were very understanding and put my mind at ease while taking such great care of me. They were there every step of the way and supported me when I was “freaking out”!! Every time I needed to contact them; their response time was amazing!! God forbid I ever need to go through this again, but I know where to turn if I need help! Debt Advisors are more than just filing bankruptcy on my behalf. They really care about what you are going through!! Thank you, Chad, Jeremy, Mike, and everyone at Debt Advisors!! I cannot tell you enough how much I appreciate all of you!! J Hammond

    J Hammond

  • Chad Schomburg and his Staff did a phenomenal job for me and in an expeditious manner. I’ve recommend countless clients to Chad Schomburg, Wow!!! Outstanding customer service from the Schomburg office:)

    Lisa Williamson