Posts Tagged ‘filing bankruptcy’

Can Bankruptcy Eliminate IRS Debt?

September 24th, 2010

As an Orlando bankruptcy attorney, I know that my clients fear IRS debt over and above all other types of debt. That fear, in some respects, is justified given the unique powers the IRS has to collect on debt owed to it. However, in some cases, people who owe money to the IRS can obtain the same debt relief with the IRS that they can with their other creditors by filing either a Chapter 7 or Chapter 13.

Not all IRS debt is dischargeable in bankruptcy. However, with the help of an experienced Orlando bankruptcy attorney, it is possible to achieve the debt relief you seek when dealing with the IRS. Basically, it comes down to timing and meeting 5 general requirements.

1. The Three-Year Rule

Normally, tax debts are due April 15th of the year after the year for which the taxes are assessed. However, if an extension was filed or the return was filed late, that date is pushed back. Once three years have passed from the date the taxes were due, the IRS debt passes this qualification.

2. The Two-Year Rule

More than two years prior to filing bankruptcy, the tax return for the IRS debt in question must be filed with the IRS.

3. The Two-Hundred-Forty Day Rule

240 days must pass after the last assessment of the tax claim by the IRS prior to filing bankruptcy.

4. Non-Fraudulent Return

No fraud was involved in the filing of the tax return in question.

5. Willful Tax Evasion was not Present

There was no attempt by the taxpayer considered be willfully “cheating” or evading the tax.

These are very basic qualifications to determine whether IRS is dischargeable when filing bankruptcy. Only an experienced Orlando bankruptcy attorney can help you determine if your IRS debt can be eliminated by the filing of a Chapter 7 or Chapter 13 bankruptcy, and help your avoid any problems that could arise out of the given qualifications.

When my clients have IRS debt they would like to eliminate when filing bankruptcy, I advise them to file an Adversary Proceeding along with their bankruptcy case. This Adversary Proceeding allows a separate Order to be entered specifically stating that the IRS debt has been Discharged in the case. With this Order, there can be no question, once the bankruptcy is closed, that the IRS debt was eliminated in the bankruptcy.

As you can see, it is possible to eliminate money owed to the IRS when filing bankruptcy. Depending on when you file the case and how old the debt is, you may be able to Discharge all or most of the IRS debt you owe.

If you have questions about whether you can eliminate IRS debt, or when you are ready to speak to an experienced Orlando bankruptcy attorney to determine if you can indeed wipe out that debt, I hope you contact me.

categories: include tax debt in bankruptcy,taxes and bankruptcy,file bankruptcy on tax debt,irs debt and bankruptcy,file bankruptcy,filing bankruptcy,bankruptcy,irs debt,tax debt,chapter 7 bankruptcy,chapter 13 bankruptcy,bankruptcy laws,bankruptcy attorney,law


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Why You Need An Experienced Bankruptcy Attorney

September 19th, 2010

Each year I am contacted by clients, seeking my advice as an Orlando bankruptcy attorney, only after they have filed their bankruptcy “pro se”, without the assistance of a bankruptcy attorney. Normally, these people are in a serious situation and in need of help immediately to stop something going terribly wrong with their case.

For example, a client approached me after she received a Motion to Dismiss from the Trustee in her case for failure to attend the 341 Meeting of Creditors. On her original meeting date, she was out of town and therefore, could not attend. She explained that she had not received anything from the Trustee regarding the rescheduled meeting date, and had not made it to that meeting either.

I contacted the Trustee and resolved the Motion to Dismiss. I then reviewed her bankruptcy petition and filed amended schedules to apply her property exemptions correctly and prevented her from losing her car.

The trouble is, many people filing bankruptcy spend some time “researching” bankruptcy online and conclude it is a simple process they can do themselves. Even though a large number of people file for bankruptcy each year and achieve the debt relief they seek, there also a large number who end up with their Discharge put on hold, losing assets that they may have been able to keep, having their case Dismissed, or just making the entire process more stressful than it has to be.

Yes, you will have to pay a bankruptcy attorney for his or her services. However, many Orlando bankruptcy attorneys, myself included, offer payment plans to their clients. In my experience, when clients come to me for help after they have filed on their own, I usually have to spend quite a bit of time undoing what was done incorrectly. In other words, had they hired me to represent them from the beginning, they may not have had to pay as much for my services as when they need my services immediately to prevent a bad outcome in their case.

When you hire an Orlando bankruptcy attorney, make sure that bankruptcy attorney has several years experience in with the local bankruptcy Court’s rules, procedures, and bankruptcy laws. This will help prevent a rocky trip through the bankruptcy process that may result in Dismissal of your case. In the end, with an experienced bankruptcy attorney on your side, you will feel less anxiety and stress on your road to Discharge.

Contact an experienced Orlando bankruptcy attorney before you attempt a “do-it-yourself” bankruptcy .


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Can I Keep A Credit Card When I File For Bankruptcy?

September 12th, 2010

The bankruptcy law is designed with the purpose of giving an honest debtor a financial fresh start by discharging his debts.

So, if you are filing bankruptcy, why would you want to hold on to one of your credit cards?

I think the question is rooted in the fear many people have that, without access to a credit card, “What will I do in case of an emergency?” I remember when I was an impressionable, naive, 18 year old freshman in college, I asked my parents if it would be a good idea to get a credit card. After all, It came with a free t-shirt! They said “Sure, you can use it for emergencies”. Well, I found that there were plenty of situations, that, in my mind, qualified as an emergency, and therefore would allow me to employ the services of the trusty credit card.

While my “emergencies” may not have qualified, there is no question there are real emergencies in life, and it is always good to have a backup plan to get you through those dilemmas. However, wouldn’t it be satisfying, if, instead of relying on that credit card to bail you out, to be able to do it yourself? This is returns us to the financial fresh start intended by the bankruptcy law. Once you have liberated yourself from the burden of your debts, you can concentrate on building your savings. After filing bankruptcy, take that $100/month you were devoting to credit card payments and pay it to your savings account instead. Now you can apply yourself to rebuilding your credit without the worry of getting caught in the same trap.

Within a surprisingly short amount of time, you can create an impressive emergency fund. Get a flat tire? You’re covered. Tooth starts aching and need to run to the dentist? No need to pay for that trip to the dentist for a year after your tooth is fixed if you have an emergency fund available to cover the cost.

Filing bankruptcy requires that the Debtor list all of his or her creditors in the bankruptcy petition. This is something I advise all of my clients to do, and that everyone who files for Chapter 7 or Chapter 13 declares under penalty of perjury has been done. I’m not as naive as I was in college, so I know that not all of my clients listen to my advice and adhere to it.

I know, for example, that some clients have tried to keep a credit card out of their bankruptcy in the hopes that they could use it. Problem is, even if you don’t list a credit card in your bankruptcy petition, your creditors will know you’ve filed (they subscribe to services that flag accounts of their customers who file for bankruptcy) and they will deactivate the account. Then, you’ve got no credit card and no disclosure of the debt in your bankruptcy. Not good.

Why not take control of your financial life by rethinking the notion that you need a credit card to help you out in an emergency and depend instead on your own emergency fund that will don’t have to get into debt to have access to.

Learn more about bankruptcy. Stop by K. Hunter Goff’s site where you can find out all about this bankruptcy lawyer and what he can do for you.


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Filing Bankruptcy: 5 Do’s And Don’ts

September 11th, 2010

It is surprising how often, as an Orlando bankruptcy lawyer, I wind up advising clients NOT to do something they planned to do before they came to see me about filing bankruptcy. Many times, they had a feeling they shouldn’t do whatever it was in the first place, but were coming to see me for clarification and certainty. Some of these plans, if seen through, could seriously jeopardize their bankruptcy case. I’ve put together a quick list of 5 things you should or should not do when filing bankruptcy.

1. DO: Disclose all of your assets and all of your creditors in your Petition

Your bankruptcy petition is the paperwork they you fill out and your bankruptcy lawyer later files with the Court. The Debtor, the person filing bankruptcy, must reveal all of their assets and all of their debts in this petition. This is one of the main prerequisites when filing bankruptcy. In other words, you have to list everyone who you owe money to (including friends and family) and all of your possessions (even that old motorcycle your dad gave you).

2. DON’T: Contact the Trustee’s office if you have an attorney.

At a recent luncheon held by the Orlando Chapter 13 trustee, she made it abundantly clear to all the bankruptcy lawyers present that she did not want to hear from our clients, and, if she did, good would not come of it. She instructed the attorneys present to make sure our clients DID NOT call her office. When the Trustee’s office receives a call from a Debtor, they have to stop whatever they are doing and bring up that Debtor’s file. As they review the file, they look very closely to see if anything has been missed. Do they have all your tax returns and have you sent the refund to them? Is the Plan payment late?

3. DO: Always keep your bankruptcy lawyer informed of any income increases or decreases throughout your Chapter 13 bankruptcy.

When you enter into a Chapter 13 bankruptcy, it can go on for up to 5 years. Think of a Chapter 13 as a partnership between you and your bankruptcy lawyer. To reach the intended successful outcome, each party must perform their duties. One of the obligations of a person filing bankruptcy under Chapter 13 is to ensure their bankruptcy lawyer is aware of any changes in their income, whether an increase, or decrease, during the entire case. While you may be hesitant to let your bankruptcy lawyer know about an income increase, you must keep in mind that it does not always result in an increased plan payment.

4. DON’T: Give away or remove your name from expensive assets you own before filing bankruptcy.

This is a BIG Don’t. It just doesn’t sound right when you say it out loud does it? Go ahead, re-read out loud what comes after the “Don’t” above, I’ll wait. There, see? It doesn’t sound right because it’s not. In fact, the law has a name for the act of transferring property a Debtor owns to someone else prior to filing a bankruptcy: FRAUD. Don’t do it, no matter what trusted friend or relative is advising you to do so.

5. DO: Disclose everything!

If there is one thing that every experienced bankruptcy lawyer tells their clients, and that is to disclose everything. In other words, if you are not sure whether or not you should list something in your bankruptcy petition, list it. It could be that it was not important and nothing is lost by disclosing it. Alternatively, what if you don’t list it and the Trustee uncovers it and believes you were trying to get away with something shady and misleading. If the second, you could be in a lot of trouble. So what you should take away from this DO: inform your bankruptcy lawyer about everything.

There are definitely a lot more Do’s and Don’ts when filing bankruptcy, if you are considering filing bankruptcy, these 5 will get you started on your way to a successfully Discharged case.

Looking for help with filing bankruptcy? Then visit www.khuntergoffpa.com to find the best Orlando bankruptcy lawyer for you.


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Divorce And Bankruptcy: Credit Card Debt

September 4th, 2010

A sad truth that any bankruptcy lawyer can tell you is that filing for bankruptcy and filing for divorce go together like peanut butter and jelly. As an Orlando bankruptcy lawyer, I have represented clients with money problems for many years and can tell you that many people file bankruptcy as a result of a divorce.

The issue of divorce and bankruptcy is so common with my clients, and the two are linked so well, I will be publishing more articles on the matter. However, this article will be devoted to the effect of filing bankruptcy and filing for divorce has on an individual spouse and any credit card debts they may owe.

The most important thing to remember when discussing divorce and credit card debt, is that the only ones party to your divorce are you and your spouse. That is, a third party, like your and your spouse’s creditors, are NOT part of your divorce proceedings and consequently, are not obligated to abide by your marital settlement agreement.

When separating, it is common for people to assign which debts each spouse will be responsible for after the divorce is finalized. These terms are often memorialized in a marital settlement agreement. This agreement legally binds the parities seeking the split-up to the terms included in the agreement. However, each spouse’s creditors rely on the credit card agreement, the car loan, the house loan, etc., that each spouse signed with the creditor at the time the credit was issued. Frankly, creditors could not care less how you decide to divide the debts between the two of you when you part, and the law is on their side.

Bottom lineIf you each were obligated to the creditor before the divorce, no matter how you decide to divide responsibility for the debt amongst yourselves, you are each still liable to the creditor after you part ways.

Hence, when one spouse discharges their liability for the debts by filing bankruptcy, the other non-filing spouse will continue to be responsible for it. In order to remove that responsibility, the non-filing spouse can attempt to settle the debt with the creditors in question, or end up filing bankruptcy themselves.

Bankruptcy and Divorce invite many complex legal issues. Over next weeks and months I will be discussing the common issues faced in Bankruptcy and Divorce in my blog.

For more information about filing bankruptcy, please check out this FREE E-COURSE from your Orlando bankruptcy lawyer. Also published at Divorce And Bankruptcy: Credit Card Debt.


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What Happens If I Stop Paying Credit Card Debt?

September 1st, 2010

As an Orlando bankruptcy lawyer, one of the first things I advise my clients to do when they decide they are filing bankruptcy and hire me is to stop paying on their credit cards. Recently, though, before I could offer that advice, a client asked me: “What happens when I stop paying my credit cards?”

The answer? Your credit card company will begin the collection process, which normally proceeds in this manner:

1. You will receive frequent phone calls from the original creditor, as will your family and your employer, attempting to convince you to make a payment over the phone. The collection agent will try to intimidate you, by saying they will ruin your financial life unless you pay up.

2. In about 90 days, your original creditor will give up and sell your account to a debt collector. This third party agency will then repeat the actions above.

3. Then, around 180 days from the time you stop making payments, you may hear from an attorney. This attorney will simply try to collect on the debt, following the same protocol in 1 and 2 above.

4. At this point, the attorney might file a lawsuit, seeking a judgment against you. A judgment would permit the creditor to collect from you through a wage garnishment. Your wages cannot be garnished without a judgment.

Kind of a long process until a judgment is obtained, right? Over 6 months from the time payments stopped being made if I added correctly. So why, as a bankruptcy lawyer, do I advise my clients to stop paying on credit cards when they hire me?

You see, the objective is for my client’s bankruptcy to be filed well prior to a judgment being entered against them. As long as no judgment is entered, garnishment is not possible. Now, my client can catch up on car or house payments, for those secured debts they intend to keep through filing bankruptcy. They are not wasting that money on payments to malicious debt collectors, for credit card debts that will be discharged in their bankruptcy. They can also use the money they have saved to create that safety net, which I advocate as their Orlando bankruptcy lawyer, to be used as part of an overall, start fresh, strategy when filing for bankruptcy.

But what about those malicious debt collection agents? Here in Florida, we have some of the toughest laws in the country to protect consumers from the abuses collectors use regularly when attempting to get my clients to pay their credit card debts. Additionally, a Federal Law also restricts those abusive acts by third party collection agents in an attempt to collect on a debt. Why not sue your creditors to enforce your rights?

The debt collection process can be an intimidating experience, or an empowering one. If you know how it works and you know your rights, the empty threats the debt collectors hurl at you in a typical phone call from them will seem laughable, and more often than not, actionable.

Get the Free eCourse to find out how an experienced bankruptcy lawyer to assist you in successfully navigating the debt collection process and help you achieve that fresh start you’ve been craving.


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Can I Pick Up A Credit Card After Bankruptcy?

December 2nd, 2009

In spite of the stigma and possible embarrassment of filing for bankruptcy, many folks have mitigating circumstances that make it often their only option to bypass repeated court proceedings against them. One thing that often worries these people is the obtaining of a Credit Card after Bankruptcy.

However regardless to what some may think obtaining a credit card after bankruptcy isn’t impossible. There are companies willing to provide this although normally you can expect high interest rates and additional annual fees.

As you may or may not know once someone has filed for bankruptcy they cannot do so again until seven years have passed. This is in fact one of the reasons why companies are even willing to provide credit cards in this situation.

Knowing this, these credit card companies have a legal recourse in collecting on any unpaid debt resulting from the card’s use. While most debt charged on a credit card is considered unsecured, if the cardholder cannot file bankruptcy, the company can use wage attachment to gain repayment.

However as you will see it is one thing to obtain a credit card after bankruptcy but it is another to be able to use it safely. The danger is that with higher interest rates and extra fees on late payments you can quickly end up back in a bad credit situation.

It is not uncommon for people to take out these cards in an attempt to better their financial situation, this is despite the fact that it is not unusual for the total annual fees associated with the card to add up to much as the card holders very credit limit.

Troubles Can Keep Adding Up

To put things into perspective let us say for example that your credit card after bankruptcy annual fees are $290 and your initial credit limit was $300, if you were only one day late for a payment you can expect on average to end up paying $30 as a late fee.

In turn this would push-up the liability to $320 which would cause another $30 fee for being over the limit, this means that the credit card holder would now have a debt of $350!

On top of all this since you have failed at this point in your obligations, your interest rate on your card can very quickly go to the maximum allowed by law.

You also would have no way out except to pay the balance on the card and some companies will make the demand that the balance be paid in full within 30 days or face collection action.

Daily phone calls, court proceedings, you name it, from here on in things can really get ugly and fixing the mess often takes several years.

As you can see although obtaining a credit card after bankruptcy is possible, the consequences if you are unable to keep up with payments can be very severe, so whether or not you should get a credit card after bankruptcy is going to depend on your situation and your ability to pay on time.

Was this Best Credit Card After Bankruptcy article helpfull? Take a look at this additional How To File Bankruptcy info.

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