Keeping debt solution options in perspective

Financial stress is something that many people find themselves dealing with on a daily basis. Many people wake up worrying about how to pay bills and go to sleep thinking about what to do about debt. This can be an extremely difficult situation for any person to be in and many folks across New Jersey just want to make the problems go away.

Some people react to debt issues out of desperation and anxiety. They may decide to pay off rising credit card debt with hard-earned retirement savings. Other people may try to simply ignore the problem and hope it goes away on its own somehow. But in either case, the long-term consequences of these choices must be considered.

In the first scenario, a person may think that withdrawing money from a retirement account is a quick and relatively painless way to pay off debt. However, pulling money out from these accounts early can result in early withdrawal penalties and additional taxes, not to mention the fact that the money is then unavailable in the future. Instead, people may want to consider filing for bankruptcy, for example, which is one way to discharge debt but keep retirement accounts intact.

Instead of reacting too quickly to rising debt levels, some people choose to ignore the problems altogether. But this can only make a difficult situation much worse. Ignoring payments and bills can result in extremely high penalties and fees that only expand over time and it can even end up costing a person his or her home.

Reacting hastily (or not at all) to debt can be a bad idea. Debt does not accumulate overnight; it builds up over time. People may want to remember this as they consider their debt relief options. Instead of a quick fix, it can be more important to find effective solutions that tackle debt and also provide financial options and stability in the future.

Source: The Star-Ledger, “Get With The Plan: Unemployment benefits ending, credit card debt mounting,” Karin Price Mueller, July 7, 2013

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Attorney Joel R. Spivack is an experienced bankruptcy and residential real estate transactions lawyer in Cherry Hill, New Jersey. Clients come to us for legal services, but what we really provide is peace of mind. For more than 30 years, Attorney Spivack has helped people make wise, informed decisions about bankruptcy filings, debt relief options and residential real estate transactions.
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