Bowen Ten Cardani, PC

Two convenient office locations in Henrico’s West End and Ashland

Call Us For Your Initial Consultation

804-767-6850

How a 401k may help with debt relief

Virginia residents or others may find themselves in a financial emergency for any number of reasons. One way to possibly get out of that hardship is to apply for a 401k hardship withdrawal. A person may be eligible for such a withdrawal if he or she faces an emergency expense related to a medical issue or a home repair. It may also possible to qualify if making a payment will help the employee to avoid eviction or provides funds to pay for funeral expenses.

Those who are interested in taking a hardship withdrawal from their 401k should first see if their plan allows for one. It is also critical that an individual have no other way to pay for the expense. In some cases, the plan a person has will be stricter about how and when a withdrawal may be taken. Those who don't meet the criteria for a hardship withdrawal may still qualify to take out a 401k loan instead.

The amount that a person may take out is limited to how much was contributed before returns are considered. Those who decide to take a hardship withdrawal may owe income taxes, and they may also forfeit the right to make contributions for up to six months after making the withdrawal. Removing money from a retirement account may also result in lost opportunities for compounding growth.

Filing for bankruptcy may have several benefits including offering relief from overwhelming debt. Individuals may be able to reorganize debt balances and repay them over three or five years. If there is a balance remaining after the repayment period ends, it may be possible to have that amount discharged. Other benefits of filing for bankruptcy may include a stay from creditor contact or other actions such as foreclosure or repossession.

No Comments

Leave a comment
Comment Information
Email Us For A Response

We’re ready to work with you.

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

close

Privacy Policy

Bowen Ten Cardani, PC

Richmond Office
3957 Westerre Parkway, Suite 105
Richmond, VA 23233

Toll Free: 866-601-7371
Phone: 804-767-6850
Richmond Law Office Map

Ashland Office
9410 Atlee Commerce Blvd, Suite 2
Ashland, VA 23005

Toll Free: 866-601-7371
Phone: 804-767-6850
Ashland Law Office Map

Super Lawyers | K. Matthew Long