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    LAW1916's Avatar
    LAW1916 Posts: 1, Reputation: 1
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    #1

    Aug 8, 2010, 11:33 AM
    Any option except bankruptcy?
    My husband and I racked up a lot of bills trying to have a baby. Those bills have all been turned into judgements now along with others that accumulated as we were going along. About $50,000.00.
    We would like to cash out his 401K from work and just pay these people off but don't know how to do it.
    He really does not want to file bankruptcy but I don't want to pay on all this (mostly interest now!) forever!
    Do we have any options?
    JudyKayTee's Avatar
    JudyKayTee Posts: 46,503, Reputation: 4600
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    #2

    Aug 8, 2010, 11:41 AM

    Your only options are to pay it off or file in bankruptcy. He cannot file in bankruptcy and walk away with his 401K intact, by the way.
    ScottGem's Avatar
    ScottGem Posts: 64,966, Reputation: 6056
    Computer Expert and Renaissance Man
    		  
    #3

    Aug 8, 2010, 11:42 AM

    The cost of cashing out your 401(k) will likely be greater than the interest. Between the 10% penalty and the tax liabilities, you could wind up losing 30-40% of the balance.

    I would try a debt consolidation first.
    JudyKayTee's Avatar
    JudyKayTee Posts: 46,503, Reputation: 4600
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    #4

    Aug 8, 2010, 11:43 AM

    I also should have suggested attempting to negotiate lower settlement amounts with the creditors.
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