I'm confused... I am considering withdrawing from a 401K as opposed to filing bankruptcy. However everything I read says this is the wrong choice. My 401K contains approx 25000.00. Doing that I can preserve my credit and clear the slate. With bankruptcy I have attorneys, stress from creditors, destruction of credit score. I am 47 yrs old and in a stable job but need to alleviate some debt. I also have a seriously disabled child I need to care for so I have to clear this debt and can't go on a long term pay off...

Someone explain why bankruptcy is prefereable to withdrawal? I'm just not seeing it... :confused:

If you withdrawn 25,000 they will take at least 7500 dollars for taxes and penalties. Plus depending on state states and your tax bracket there may be additional taxes due when you file at end of the year.

Next of course you lose all the future value of your retirement plan, that you will need latter.

Bankruptcy, : what stress with creditors, they can not even contact you once you file. Almost none ever appear at any bankruptcy hearing and your attorney is there with you if they do.

Destruction of credit score, lets be frank, if you are in such bad shape, so behind on bills that you have or consider bankruptcy, your credit is trashed already.

And would not having the money in a account for future needs of the disabled child important also.

Best suggestion, to see if you even qualify, since you have to meet income to debt requirements.

Visit a bankruptcy attorney, have all your bills, all of your debts and all your income and see what they think.