Mr. Taieb has seen clients for years who are constantly broke because they are making huge payments each month to repay pension loans.
Besides creating a huge debt for yourself, there are other side effects.
Mr. Taieb recently had a client who borrowed a substantial amount from her pension and now owes a huge amount of money to the Internal Revenue Service and the State of New Jersey. Besides incurring huge tax implications, if you use the money to buy assets such as a vehicle, you may be stuck with non-exempt assets which would increase the amount you have to pay to unsecured creditors in Chapter 13, or could give the Chapter 7 trustee the ability to sell the non-exempt asset in Chapter 7.
Therefore, clients have to learn that if you borrow against your retirement, there are huge tax implication and financial stress on you if you borrow against your pension. Thus, if you are thinking about borrowing from your pension, please contact TAIEBLAW to see what other options are available for you.
If you have any questions concerning this matter or any other matter, feel free to contact me at 856-235-4994.
Steven N. Taieb, Esq. is here to help you and is a South Jersey Bankruptcy Attorney who has helped over 7000 people with their financial problems for the past 33 years and is board certified in consumer bankruptcy law by The American Board of Certification which is accredited by The American Bar Association.
We are more than happy to discuss all your options and to see if bankruptcy is the best option for you.