Bohemia, NY (PRWEB) August 13, 2012
August 13, 2012, debt collection agency Rapid Recovery Solution, reacts to an article published on CNN Money which expresses that many Americans have defaults on their 401(k) loans due to excessive borrowing. The article indicates that borrowing has resulted in draining retirement savings by nearly $37 billion each year.
According to the CNN Money article, several people who need cash to cover specific expenses, like debt, emergencies, or everyday necessities, take out loans against their retirement savings. The article continues to explain that there is an association between 401(k) loan defaults and the United States unemployment rate and states, “when a participant with an outstanding 401(k) loan loses their job, the full loan comes due within 60 days. Many people fail to pay off the loan in time, forcing them to default.”
According to the article, if a 401(k) loan is defaulted there is a charge for income tax on the amount withdrawn. In addition, if the default is a result of a job loss, a 10% penalty is implemented. John Monderine, CEO of debt collection agency Rapid Recovery Solution, explains, “penalizing you 10% on your money is terrible and this injustice must be dealt with.” Monderine goes on to state, “If the individual saving knew about the 10% penalty most would opt to just save in a bank.”
The CNN Money article states that the money used toward 10% penalties could instead be used for retirement savings. The article concludes by stating that many researchers wish to adjust the current rules and that this transformation of rules would allow protection against losses for people who default on 401(k) loans due to the loss of a job.
Founded in 2006, Rapid Recovery Solution, Inc. is headquartered at the highest point of beautiful Long Island. Rapid Recovery Collection Agency is committed to recovering your funds. We believe that every debtor has the ability to pay if motivated correctly. We DO NOT alienate the debtors; we attempt to align with them and offer a number of ways to resolve not only your debt but also all their debts.