Avoid certain actions when looking for debt relief

On Behalf of | May 11, 2020 | Chapter 7 Bankruptcy

A number of situations could cause Connecticut residents to find themselves with money problems. Many people try their best to stay on top of their expenses, but unexpected events can easily wreak havoc for individuals, even those who have made financial plans. In particular, many people may be facing job loss and other issues at this time that may have them considering their debt relief options.

If parties have lost their job, have significant medical bills or have faced unexpected expenses, it is common for available funds to dwindle quickly. Some people may think that they can avoid having to take major steps like filing for bankruptcy by dipping into their retirement funds. However, this option is typically best avoided. Retirement funds are not subject to liquidation during bankruptcy, and if individuals withdraw funds early, they could face penalties and fees that make their situations worse.

It is also not wise to start selling assets before filing for bankruptcy. If filing for Chapter 7 does seem likely, selling assets before filing could be detrimental. Individuals may sell assets that would otherwise be exempt from liquidation, or they may miss out on benefits provided by selling those assets later.

Facing financial problems can certainly leave Connecticut residents wracking their brains for the best way to handle their situations. The examples given here may have seemed like smart options, but really, Chapter 7 bankruptcy may be a wiser course of action. If individuals are interested in their debt relief options and how to best handle their financial concerns, they may wish to consult with experienced attorneys.


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