That depends on a number of things. If you have a short list of bills that need to be paid or monthly expenses for a month or two that your savings can handle, then yes, you likely should tap into your retirement account or savings account to pay those bills. The important thing is that your current income moving forward can sustain your ongoing monthly expenses.
If you realize that you’re behind on a couple of month’s mortgage and you have car payments, student loans, credit card, and medical debt, you might have other options. If you want to avoid going into further debt and have the ability to pay all of your debt using your retirement account and/or savings, you can avoid filing a bankruptcy.
However, in many instances, a bankruptcy can help you get current on your mortgage/rent and car payments. A bankruptcy can help defer student loans and get you a lower payment possibly. In most cases, you’d also not be responsible for paying on unsecured debt like credit card, medical bills, and payday loans.
Often, I see a lot of people dig into their savings and retirement accounts, pay off some debt, and realize it’s still not enough and head into bankruptcy. In many cases, you get to keep all the money you have in your retirement accounts. Even if you made great money, a bankruptcy can help streamline your payments and you’ll likely pay much less.