Back taxes are difficult to discharge in a bankruptcy, but it is not impossible. Back taxes are after all unsecured debt, which are dischargeable in a Chapter 7 bankruptcy - meaning the obligation to repay the debt is eliminated. However, it is widely know that the IRS typically files a lien against property when they are not paid. If that lien is filed before an individual files bankruptcy, a bankruptcy attorney will have to negotiate that lien separately despite the bankruptcy discharge. … [Read more...]
Chapter 11 Bankruptcy Protection for Small Businesses
Chapter 11 bankruptcy allows a business owner the opportunity to restructure a business while it continues to operate. If a business owner is facing high amounts of debt, but believes that the business can thrive after some reorganization, then filing for Chapter 11 bankruptcy may be an ideal solution to solve a difficult financial situation. Chapter 11 Bankruptcy As part of the Federal Bankruptcy Code, Chapter 11 is commonly referred to as a reorganization bankruptcy. Chapter 11 is available … [Read more...]
What Property Can I Keep in a Bankruptcy?
Under bankruptcy, some property is exempt from the bankruptcy, which can vary from state to state. Property that is not exempt can be sold by the bankruptcy trustee to pay off creditors. If you have questions regarding what property is exempt in the state of Illinois it is important to consult a local bankruptcy attorney for up to date information as exemptions amounts can change. Common exemptions include a certain amount of equity in a home - the homestead exemption - that doubles for … [Read more...]
Not All Debt Eliminated in Bankruptcy
If you are considering bankruptcy protection to solve a difficult financial situation, it is important to note that some debt cannot be discharged. For starters, debt such as child support arrears and back taxes that many Americans struggle with cannot be discharged in bankruptcy. Student loan debt is difficult to discharge, reserved for those who can prove extraordinary undue hardship, with discharge meted out on a case by case basis. Whether debt is discharged can also depend on whether … [Read more...]
Specialty Medical Credit Cards Tied to Rising Debt
There are tens of billions in outstanding medical bills currently in collections, affecting one in five American families. For patients with little or no health insurance coverage, offers of medical credit cards with zero percent introductory interest have been growing to bridge the gap. In fact, between 2018 and 2020, families using specialty medical credit cards racked up over 23 billion dollars in medical debt. Taking a card out to afford the high cost of medical care has only … [Read more...]
SAVE Student Loan Repayment Plan
The new SAVE (Saving on a Valuable Education) plan promises to reduce student loan payments, set to resume next month after the pandemic related pause. Much like previous income driven repayment plans, SAVE calculates monthly payments based on income and family size to make payments more affordable for borrowers.. SAVE is calculated using the difference between a borrower’s discretionary income and 225% of the poverty level compared to existing income driven plans that calculate discretionary … [Read more...]
How Debt Consolidation & Relief Programs Compare to Legal Bankruptcy Protection
Individuals and families experiencing a difficult financial situation may wonder about the difference between a debt settlement, debt consolidation, and legal bankruptcy protection. At a glance, debt consolidation is a process of combining all of a consumer’s debt from various lenders into one affordable monthly payment, which can stretch into years or decades while interest continues to accrue. Debt settlement is a process of negotiating debt down so that a consumer owes less overall, with … [Read more...]
2023 Bankruptcies Filings Up from Same Period Last Year
In the first six months of 2023, bankruptcy filings increased dramatically in the first six months when compared to the same period in 2022. Chapter 11 bankruptcies, a form of bankruptcy that involves the reorganization of a debtor's business affairs, debts, and assets, surged nearly 70 percent with filings for small businesses at 55%. Chapter 13 bankruptcies, a type of bankruptcy where individuals, married couples, self-employed or incorporated business can reorganize debt into a … [Read more...]
Can I File for Bankruptcy Again?
Sometimes financial difficulties can continue after filing for bankruptcy, leaving many wondering if they can file for bankruptcy a second or third time to tackle lingering issues. The answer is technically yes, an individual can file for bankruptcy again, but whether debts will be discharged in a repeat filing depends on the timing and whether an individual files the same type of bankruptcy. If an individual files under Chapter 7, they will need to wait 8 years after filing to seek another … [Read more...]
Chapter 7 & Chapter 11 Bankruptcy Commonly Used to Tackle Debt
Bankruptcy protection is a strategy for businesses and individuals to discharge debts and resolve disputes with creditors. Bankruptcy offers a fresh financial start to those facing financial difficulties, providing needed breathing room from creditor actions to reorganize or liquidate debt. There are six different types of bankruptcies: Chapters 7, 9, 11, 12, 13 and 15. Chapter 9 is used by municipalities. Chapter 12 applies to family farmers and fisherman, Chapter 13 bankruptcy is a … [Read more...]
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