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I Have to Go Into My 401(k) to Pay My Credit Cards. – Julio

“Dear Steve,

Credit card debt is 44K+. I am a little a couple months behind on 2 cards ot of 4. Mortgage is also 6 months behind. Trying to shortsale or use the home affordable program as I submitted the application to the bank. Auto loans 2 are behind and take a good chunk of my cash.

Is it possible to pay the credit card banks with 401K? It doesnt make sense that I have to go into bankruptcy when there is that money available to pay.

Julio”

Dear Julio,

You know what else doesn’t make sense, draining your 401(k) to pay these bills and sacrificing your retirement when those funds could be protected under bankruptcy.

Is there any reason you could not go bankrupt to reorganize your debt and then repay your creditors latter as you can afford to in order to meet your past obligations, if that’s what your goal is?

If you don’t do something soon, this is not going to end well. Time is short.

Click here to find a local bankruptcy attorney and go talk to the for free before you tap your 401(k).

Please update me on your progress by posting updates here in the comments section of your question. I’m very interested in how this works out for you.

Sincerly,
Steve

You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.

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About the author

Steve Rhode

Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.

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