Retirement assets are protected in Chapter 7 or Chapter 13 bankruptcy. Don’t cash them in to pay your creditors.

Yes, it is possible but only in a Chapter 13, under certain circumstances. First you have to qualify for a Chapter 13, which means you have some money to pay back to your creditors.

This is a hot button question I get asked all the time. It’s no wonder, with about 1 trillion dollars (that’s more than the auto industry bailout and the Wall Street bailout) in student loan debt in this country and a very bleak job market for college graduates, this will become a crisis in the coming years. In fact, this very well may be the next meltdown in the country.

This is the second part to my last article I wrote on whether spousal support can be discharged in bankruptcy. If you missed that article, you can read it here. Credit card debt works differently than a Domestic Support Obligation and there are different rules for this type of treatment.

One of the most depressing statements I hear, “I’m such a loser because I’m filing for bankruptcy”. I’m not sure where this sentiment comes from, but it could be traced to what we have been programmed to believe from the news media, financial pundits, and the credit industry. We are taught that we get into debt, the only way out is to pay our bills. It’s the right thing to do!

Most people don’t realize that filing bankruptcy can stop a garnishment. The conventional thinking is, “Well, they got the judgment in court, so nothing I can do”.