by Mike Wallace | Nov 14, 2018 | Bankruptcy, Taxes
Consequence in Bankruptcy for Not Timely Filing Tax Returns
We fear the Internal Revenue Service because of their power over our lives. Therefore, clients come to our office that have failed to file an income tax return for certain tax years. Significant consequences can arise from not filing or late filing a tax return.
What to expect if contemplating bankruptcy and you have unfiled tax returns?
Courts have concluded that failing to file a timely return, by the due date or pursuant to an extension, can result in the following:
- IRS can treat the late filed return as no return at all;
- IRS can prepare what is known as a “substituted return; and
- Taxes that might otherwise have been dischargeable in bankruptcy potentially become non-dischargeable.
Nothing good comes from failing to file an income tax return in a timely manner. I often find that bankruptcy clients have failed to file a return because they owe taxes that they cannot pay. Or, the Department of the Treasury is garnishing tax refunds that are due to the taxpayer. File your tax returns in a timely manner, no matter the consequences. File the tax return even if you are not paying the tax liability that is due.
So, the passage of time benefits taxpayers. If enough time passes, tax liability may be dischargeable in a Chapter 7 bankruptcy. In a Chapter 13 bankruptcy the tax liability may be a general unsecured claim. This results in the IRS having no priority over a credit card company.
You can determine if there are unfiled tax returns by going to www.irs.gov and clicking on “Get Your Tax Record.” Once you have established an online account you can obtain “Record of Account Transcripts.” Our firm is now an authorized paid tax preparer with the Internal Revenue Service, so please let us know if you have any questions regarding the preparation of overdue returns.
by Mike Wallace | Jul 11, 2017 | Financial News
http://www.businessinsider.com/why-credit-cards-more-popular-than-debit-cards-2017-6?utm_source=July+10%2C+2017+email&utm_campaign=7%2F10%2F17&utm_medium=email
by Mike Wallace | Jun 28, 2017 | Bankruptcy, Chapter 13
WHEN IT COMES TO CONSUMER BANKRUPTCY CHAPTER 13 IS OFTEN THE BEST CHOICE
Even though Chapter 7 bankruptcy can have many benefits for the Debtor who qualifies and has mainly unsecured debt they are seeking relief from, Chapter 13 bankruptcy has many advantages over Chapter 7. Chapter 13 has the following advantages:
- If a Debtor is behind on mortgage payments and wants to save their home from foreclosure, Chapter 7 can prevent a foreclosure, but only for a temporary time. Chapter 13 allows for the restructuring of the arrearages to be paid over time.
- An unsecured mortgage lien can be stripped off in a situation where the Debtor is underwater on their mortgage.
- Chapter 13 bankruptcy allows a Debtor to keep their options open. The Debtor can most of the time dismiss and refile, can voluntarily dismiss the Chapter 13 or can convert to a Chapter 7 bankruptcy.
- Mortgage holders are generally willing to work with a Chapter 13 Debtor related to loan modifications.
- For a short period of time a Debtor can get a vehicle back after repossession.
- If a motor vehicle was financed more than 910 days prior to a Chapter 13 bankruptcy, the creditor can be paid the value of the vehicle instead of what is owed on the vehicle. Additionally, Debtors who have a clear title to a vehicle and then borrow against that vehicle can pay the lender the value instead of what is owed.
- Debtors can avoid the Reaffirmation Agreement process in Chapter 13 and avoid the risks associated with reaffirming the contract on a vehicle.
- Debtors do not surrender non-exempt property in a Chapter 13.
- Debtors maintain control over the disposition of non-exempt assets in Chapter 13 and can benefit from creditors not filing a claim in their Chapter 13.
- Ability to deal with tax problems in Chapter 13.
- Flexibility in the payment of attorney’s fees.
This is in no way an exhaustive list of the advantages of Chapter13, but it is some of the more common advantages. Please give me a call at (800) 867-1583 if you are considering filing a Chapter 13 bankruptcy and we can talk about your specific situation.
As always, any opinions expressed on this website are just that, opinions. Your individual situation might be different than outlined above, so it is probably best that you give me a call to discuss your individual situation. I pride myself on giving you the answers to your questions that are based on your individual circumstances.
by Mike Wallace | Jun 19, 2017 | Chapter 13
IF YOUR DEBT EXCEEDS A CERTAIN LEVEL YOU CANNOT FILE A CHAPTER 13 BANKRUPTCY
Even though Chapter 13 is the best or only solution for you from a bankruptcy standpoint, you might not be qualified to file a Chapter 13 bankruptcy because of the debt limits.As of April 1, 2016, a debtor cannot have more than $1,184,200.00 in non-contingent, liquidated secured debt and $394,725 in non-contingent, liquidated unsecured debt. If you owe more than these amounts you can only file a Chapter 7 or Chapter 11mbankruptcy.
Please give me a call at (800) 867-1583 if you are considering bankruptcy.
As always, any opinions expressed on this website are just that, opinions. Your individual situation might be different than outlined above, so it is probably best that you give me a call to discuss your individual situation. I pride myself on giving you the answers to your questions that are based on your individual circumstances.
by Mike Wallace | May 11, 2017 | Bankruptcy, Chapter 7
CREDIT CARD COMPANIES MAKE IT A COMMON PRACTICE TO FILE LAWSUITS AGAINST DELINQUENT CARDHOLDERS
If you have been sued by a credit card company or a junk debt buyer, you can count yourself among the thousands of individuals that are sued on a daily basis throughout the country. So, you have been served with suit papers, what do you do now? You do not want to do what the typical person does, which is to ignore the suit!
Credit card companies and junk debt buyers are counting on you to be the typical person and not file an answer to their lawsuit. This is what a majority of people do when served with a collection lawsuit. If an answer is not timely filed to the lawsuit, a default judgment will be entered by the court. You do not want a default judgment to be entered against you. More on that subject in a minute. If you are located in the East Texas area and you get served with a collection lawsuit, you need to pick up the phone without delay and give me a call. Bankruptcy might be the solution, but if not, the alternative is not to ignore the lawsuit.
I am repeatedly contacted by people who have been sued in the past and a default judgment has been entered against them. At times these default judgments are for substantial sums of money and the judgment creditor has garnished a bank account, attempted to execute on the judgment or served the judgment debtor with written discovery to ascertain assets owned. Often the person is calling me because they are attempting to sell a piece of real estate and the judgment has been discovered by the title examiner (judgment liens are created by the judgment creditor filing an abstract of judgment in the county in which the debtor owns real estate). Just in the last year I have represented several people who are trying to recover from a default judgment that has been taken against them.
If you have been sued, don’t let this be you. Call me at 800-867-1583 and we can discuss what options are best for you!
