Early Withdrawal

Archive for December, 2005

Question: Why should I lie and say that I have been separated for a year?

My husband recently told me that he wants a divorce. In october he moved out saying that he wanted a divorce, and right after Thanksgiving he moved back in saying that he loved me and made a mistake. Now-without warning-he wants me to say that we have been separated for a year (we live in Louisiana and that is the new law). Other than wanting to get a quick divorce, does anyone know any legal reason how he would benefit. He has agreed to sign the house over to me (I have a 15 yr. mortgage, and 30,000 equity in it), He has also agreed to give me all of the furniture. The only thing that he personally has that is worth any money is a IRA that is approximately 25,000- before penalties for Early Withdrawal. Any help would be appreciated because I have never been through a divorce.

Answer: Yes i did the same thing and said i was seperated overe a year so i could have a quick divorce too. its easier and you get them out of your life faster. what ever he’s promising you however make sure you have it in writing or put on a legal document they can tell you anything and you trust them and then bam later everything was a lie.

John Brennan Takes Questions on National Security at NYU

Question: Should I borrow from my 401k to pay down credit card debt?

I am 25 and am thinking of borrowing from my 401k to payoff my credit cards which are many months behind. There is about $5000 in there and my debt is about $3500. Also I am thinking of changing jobs soon and I know they will either send you a check for your balance less Early Withdrawal Penalties or let you roll it over. If i was to change jobs would paying the penalties be a better decision than to continue to let my debts go unpaid. Thank you for time and thoughts.

Answer: There are big penalties for cashing out a 401K. How many months is “many” months?

Do whatever you can to prevent the cards from being charged-off…this happens at the 5 – 6 most past due mark….A charge off really damages your credit and when it happens the damage is done and there’s no undoing it…it will stay for 7 years on your credit report….even if you pay the debt back in full. If your cards have not yet charged off…..and cashing out the 401K would help to prevent charge-offs, then I would say “yes,” cash out the 401K to settle the debts… even with the cash out penalties…because you’d be averting long term damage to your credit rating. FYI: If you are many months behind on your credit cards…then you’re credit rating is already damaged anyway regardless of whatever you do….

If you are “many” months behind, then you may want to try to settle for less…make offers starting @ 30% and go from there. Only do this if you can pay any settlement up front…..Don’t waste your time if you can only pay a settlement in small amounts over several years…they aren’t interested in these payment terms for settlements…they’d want them paid up front. Get all terms for any settlement up front BEFORE you pay….then pay with a money order or cashier’s check. Don’t give them your checking account numbers.
If your cards have already completely defaulted – http://sites.google.com/site/catdadsadvise/

401k Planning – Early Hardship Withdrawal Rules

Question: Do I have to liquidate my portfolio in order to change investment firms?

I’m unhappy with the investment firm I’m with. I want to change to another company, but was told I would have to liquidate my portfolio in order to do so. I have no annuities or accounts that would be penalized for Early Withdrawal. Just mutual funds and stocks. If I have to liquidate, I was told I would sustain a heavy tax burden if I liquidated at this time. I was also told by a friend that transferring from one company to another is possible. It depended on what your portfolio was made up of. If anyone knows the answer to this question…Please help me out. Quickly…The liquidation is suppose to be Friday, October 26.

Answer: In most cases liquidation is not necessary. You currently own stocks and shares in mutual funds. Those are owned by you and managed by your investment firm. You are asking to change management responsibility for what you own, not a change in ownership. Talk to your new broker. They will be able to arrange a transfer of assets from your old firm to the new firm.

Assemblymember Dave Jones Introduces Senior Financial Abuse Legislation