Many of our clients are receiving Form 1099s from creditors reporting income to the Internal Revenue Service. This “income” is actually debt the creditor forgave or wrote off. To the IRS, this forgiveness of debt is considered taxable income just as if you had earned wages from employment. Receiving the 1099 can be potentially harmful if you do nothing to respond, but there are some exceptions that can help you avoid the tax liability. The First Exception The first exceptionRead more
Chapter 13 bankruptcy
Chapter 13 bankruptcy is my favorite type of bankruptcy because of what a debtor can do to deal with debt. What is a Chapter 13? It helps a person reorganize debts and may be one of the best ways to save a home. Over a 3-5 year period, debtors make payments to a trustee, who disburses the funds to creditors. Unpaid debts remaining at the end of the 3-5 year period are discharged. Secure creditors will receive money by theRead more
Discharging Income Taxes
Many people think taxes can’t be discharged in bankruptcy but that is not the case. Some taxes can be discharged but it’s important to know how old the taxes are and what kind they are to determine whether bankruptcy can be used to eliminate tax debt. Here is a shorthand way to determine whether taxes can be discharged There are four questions to ask and the correct answer is in parentheses following the question. 1. Are these income taxes? (Yes.)Read more
You’re Not Alone When It Comes To Bankruptcy
Our bankruptcy clients often comment to us, “I never thought this would happen to me.” Well, just who does bankruptcy happen to? The stigma of bankruptcy has caused many false concerns and unnecessary speculation. As we all know, life can take unexpected turns. Job loss, divorce, sickness, and failed business ventures occur at the most inopportune times and can send our finances into a tailspin. It’s important (now more than ever) to realize that bankruptcy isn’t exclusive to the poorestRead more
Did You Know That Chapter 13 Bankruptcy Can Stop Foreclosures?
Government and lender mortgage modification programs have resulted in little success at helping people permanently modify home loans who are facing foreclosure. Many debtors tell of lenders losing paperwork, not responding to inquiries, misunderstanding modification program requirements and offering modifications that do little to respond to their needs. There are options available to people facing foreclosure. Some debtors have successfully challenged a foreclosure based on improper servicing by the lender. Others have used Chapter 13 bankruptcy to cure mortgage loanRead more
Too Proud to File Bankruptcy? Think Again.
Most people in debt are, at least initially, resistant to filing bankruptcy. Filing chapter 7 or chapter 13 is sometimes viewed as taking the easy way out, or looked at as a good way to ruin credit scores, or as a moral failing to be avoided. These feelings, combined with the inability to pay debts, result in a great deal of stress. The fact is that people do have pride, and no one wants to file bankruptcy if it canRead more
Damages from creditors could put money in your pocket!
Some of our clients have the cost of their bankruptcy case paid for with damages they receive from their creditors. There are several situations within bankruptcy filing that may result in compensation for you. Compensation from creditors may include: Stay violation: creditors attempting to collect a debt after the bankruptcy is filed Discharge violation: creditors attempting to collect a debt after the bankruptcy is complete Debt Collection Violations: creditors harassing, threatening, falsely representing themselves, contacting 3rd parties regarding your debtsRead more
Sub-Prime Mortgages Reappear Under New Name
Do you remember this dirty word from not so long ago: “sub-prime?” In hindsight, its usage and manipulation by lending institutions catapulted our economy into the toilet…a move we’re still trying to recover from. With investors holding billions of dollars in properties they need to sell, two of the largest financial institutions, Wells Fargo and Citadel Servicing Corp., are back in the sub-prime game. Only this time they’re operating under the guise of a “Second Chance Purchase Program.” What DoesRead more
Credit Report Mistakes
The Attorney General of Mississippi has filed a lawsuit against Experian, which, along with Transunion and Equifax, make up the three largest credit reporting companies. These companies collect information about consumers and then sell it back to lenders, insurance companies and others. What Was The Problem? The problem is that these reports on consumers are frequently full of mistakes and misinformation. According to investigators with the Mississippi Attorney General’s office, Experian: mixed up reports of consumers with the same orRead more
Is This Debt Yours?
According to the Federal Reserve, one in seven Americans is being contacted by a debt collector. This is up from one in twelve just ten years ago. Where Is My Debt? With 4,500 debt collection agencies in the United States, people find it hard to keep track of who is collecting which debt. Debts are bought and sold so many times that in the bankruptcy schedules we prepare we often list multiple debt collection agencies for one debt just toRead more
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