“Hi Steve,
My wife is out of work and I was for about a year. We have about 40K in CC debt and there is no way I see to get rid of that. We have 2 houses and can’t selll the one we do not live in as the market stinks. We have the two mortgages. I have 54K in a self directed IRA I want to use to pay off the cc debt. I make 90K yr but we have the cc debt, car payments, living expenses and our salaries do not make the monthly liability.
I want to know should I take the money out, and if so what would I get minus all the fees? I am 43 yrs old and my wife 48 with no IRA and a 13K yr job.
David”
Dear David,
I think it would be an utter mistake for you to touch that money in your IRA. At this point it is protected from your creditors. If you take it off and settle or pay off your credit card debt there is no expectation that it will remedy your overall situation.
If you are unable to unload one of those homes you are probably headed for bankruptcy and if that’s the case, call me cold, but I think you need to leave the IRA funds where they are to protect them. You need to leave this money in and let it grow because you will grow old fast.
Do me a favor, contact a local bankruptcy attorney and ask for a free bankruptcy consultation. Go in and talk to the bankruptcy lawyer about your situation. Report back and let me know what happens.
Steve
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Hi Steve,
Help! I am the only one working and my husband has been unemployed for 4years and bills are mounting! He has taken money out of his Tradition IRA once to help me pay some of the bills and now wants to take more out a second time 1 one year. My question. I know there willl be a 10% penalty that will be applied. However, will it be applied twice or once if he takes money for a second time in one year! Also, do you think it is best to take the money out now since this is our ONLY option and not wait until next year when I hope he finds a job and our income will be higher.
You should investigate bankruptcy before you touch a penny of your retirement funds.
I’d suggest you first read How to Get Out of Debt. The Honest and Unvarnished Truth and The Truth About The Success Rates, Failure Rates and Completion Rates of Credit Counseling, Debt Settlement, and Bankruptcy. They will give you a great overview of what we need to deal with to get you moving in the right direction.
Then use the free How to Get Out of Debt Calculator to review your options.
Once you’ve identified a company you want to work with, then follow my step-by-step guide on how to check out a debt relief company.