Many professionals, including bankruptcy attorneys, will advise a debtor who is unable to pay monthly debts to “investigate your options.” So how many “options” does a person have when there is not enough money to pay the bills? The answer is: three.
The first is the “Do Nothing” option. Debtors who engage in this option hope that by avoiding phone calls and collection letters the debt will somehow just disappear. That is the same magic that makes a two year old become invisible when she closes her eyes. Obviously if you won’t see it, the collection companies can’t see it.
The “Do Nothing” option is the worst option of all because the debt does not disappear. In fact, the debt becomes bigger with increased fees and interest. Additionally, the debt collection efforts become more aggressive and may result in harassing telephone calls to family, neighbors, or your employer. Finally, you will likely be sued, your property seized or your income garnished.
The second option is “Negotiation.” Many debtors have had positive experience with this option which may include direct negotiation with the creditor for better terms, or help through a third party like a credit counselor or an attorney. Unfortunately, many people do not realize the consequences of negotiation which may include a resulting tax debt, negative items on a credit report, increased debt through fees and default interest rates, and substantial third party fees. It is well documented by the media and state attorney generals that many debtors that attempt the Negotiation option (e.g. credit counseling, debt settlement, debt negotiation, etc.) end up in worse financial shape because they opted for debt negotiation. If you elect the Negotiation option, hire a qualified and experienced professional.
The final option is “Bankruptcy.” Many professionals describe Bankruptcy as the “final option,” but in truth it may be the best option when you cannot pay your bills. Bankruptcy can give an honest debtor breathing room to reorganize debt without the pressures from collection agencies. Bankruptcy can also legally discharge debt without increased fees or tax consequences. At the end of a bankruptcy case the debtor can go forward with a “fresh start” and new financial beginning.
If your family is struggling with more month than money, it is time to examine your options. In the end, choose the option that is best for your family. Speaking with a qualified bankruptcy attorney can answer many of your debt questions.
Showing posts with label tax. Show all posts
Showing posts with label tax. Show all posts
Wednesday, February 17, 2010
Sunday, March 29, 2009
Tax Time - Discharging Taxes in Bankruptcy
Well, since it is tax time I thought a timely topic to talk about would be discharging taxes in a Bankruptcy. Certain types of tax obligations, such as income taxes, may be discharged under specific circumstances. Many required factors must be met before any tax can be discharged under Chapter 7 or Chapter 13. In Chapter 7, the minimum requirements for discharging federal or state income taxes are:
(1) It has been over 3 years since the returns were last DUE (including extensions),
(2) The returns were timely filed or it has been at least 2 years since the returns were filed,
(3) There was no fraud involved or attempts to evade the tax, AND,
(4) The taxes were not assessed within the last 240 days.
Again, discharging taxes is an extremely complicated area, and you should definitely consult with an attorney before deciding whether to file based on dischargeability of your taxes.
Tax Liens that have attached to property will survive a bankruptcy. What does that mean? It means that the lien will stay against your property regardless of your discharge of the underlying debt. So, when you ultimately sell that property, if there is extra money available, the lien will be paid first from those proceeds unless you have the lien removed.
Bankruptcy Attorney Erich M. Niederlehner, of Mobile, Alabama, Pensacola Florida & Fort Walton Beach, Florida provides qualitiy legal Bankruptcy services to the citizens of Escambia County Florida, Santa Rosa County Florida, Okaloosa County Florida, Walton County Florida, Mobile County Alabama, Baldwin County Alabama which includes but is not limited to the following cities:
Pensacola|Gulf Breeze|Milton|Pace|Midway|Pensacola Beach|Navarre|Navarre Beach|Jay|Century|Central|Cantonment|Crestview|Fort Walton|Destin|Niceville|Fort Walton Beach|Freeport|Mobile|Spanish Fort|Fairhope|Foley|Daphane|Silverhill|Grand Pointe|Gulf Shores|Orange Beach|Loxley|Elberta|
113 N. Palafox Street, Pensacola, Florida 32502 - Main Office
16 Ferry Road, S.E., Fort Walton Beach, Florida 32548 | 401 Church Street, Mobile, Alabama 36602
16 Ferry Road, S.E., Fort Walton Beach, Florida 32548 | 401 Church Street, Mobile, Alabama 36602
Toll Free: 877-607-2228
Pensacola: 850-607-2222
Alabama and Florida Bankruptcy Attorneys offer Affordable Bankruptcy, Debt Relief & Debt Consolidation in Alabama and Florida. Bankruptcy Attorneys provide Low Cost Bankruptcy & Discount Rates on Bankruptcy Attorney Fees serving Mobile, Alabama, Pensacola Florida & Fort Walton Beach, Florida.
Alabama and Florida Bankruptcy Lawyer – Attorney Erich M. Niederlehner Chapter 7 &13, Affordable Debt Relief & Bill Consolidation in Alabama and Florida.
Alabama and Florida Bankruptcy Lawyer – Attorney Erich M. Niederlehner Chapter 7 &13, Affordable Debt Relief & Bill Consolidation in Alabama and Florida.
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