Finding yourself in debt that continues to mount is quite an ordeal. Many people who find themselves in debt tend to have trouble getting out of it quickly. If debt continues to mount, you will need to find different ways to pay it down. Sometimes having a full-time job just doesn't help. Today, we will take a look at asset liquidation as a way to pay down debt.
When you come to the realization that your income will not be able to help you climb out of debt, it might be time to consider asset liquidation. There are pros and cons to performing asset liquidation and you must realize all of them prior to making a decision.
For starters, there will likely be implications on your taxes should you withdraw money from your 401(k) prior to your eligible age. This will hamper your tax status and how you file the following year greatly. You likely will be hit with a hefty price tag should you go this route.
Sticking with your tax return, liquidating assets could move you to a different tax bracket. This might not be something you are prepared for at this point in your life, especially if your income will not support this change in the future.
If you are considering cashing in your life insurance policy, you might have to pay a hefty surrender fee. Aside from the surrender fee, your family and other dependents are not left unprotected since you no longer have a life insurance policy in your name.
Are you dealing with mounting debt in Long Island? A Chapter 7 bankruptcy attorney can help you determine what is best for your situation, including asset liquidation and filing for bankruptcy protection.