If you’re at the end of your rope financially, you may be considering bankruptcy as a way to start over with a clean slate. This can be a perfectly legitimate way to start over when you have been overwhelmed by a huge amount of debt and can’t seem to find a way out. At the same time, you may be reluctant to file a Hawaii bankruptcy because you’re concerned about losing your retirement. Will you lose your retirement if you declare Chapter 7 or Chapter 13 bankruptcy?

The good news is that bankruptcy is actually designed to protect your retirement savings. Many people cash in their 401(k)s or use their home equity in order to pay off their debts, only to end up in bankruptcy court anyway a couple of years later. This is really a tragic scenario, since these retirement savings would’ve been protected under typical bankruptcy proceedings. In this sense, bankruptcy should not be considered only a last resort, since doing so may actually make the situation worse. Instead, you should ask yourself whether you can pay off your debts over the next few years while still maintaining a reasonable budget. If not, it may be time for you to give bankruptcy some serious thought.

It’s perfectly normal to be a little nervous about what seems like a drastic step, but you may be able to wipe out all your debts and get a fresh financial start without compromising your pension plans for your home equity. Make sure to speak with a Hawaiian bankruptcy attorney as soon as possible and discuss all of your options carefully so you can make the best decision for you and your family. Despite the changes in the bankruptcy code, this option is still available for many families even if the process has become more involved.