Thursday, November 22, 2012

Debt Relief Services for the Tax Defaulters

There are many individuals who are facing a tough time paying their bills and are failing to pay their taxes on time. It may be because they have suffered loss in business or have been ignoring to pay the taxes due to any other reason. Failure in tax payment is considered to be a serious offence, which has serious consequences. The defaulters might have to face tax lien, wherein, the government seizes their real estate property, retirement accounts, brokerage, and savings account. If the tax lien is filed, the individual's credit rating would be affected and he/she will not be able to buy or rent a house, rent an apartment or sign a lease. For such individuals, debt relief services from the specialised firms, is the only ray of hope.

Many companies or individuals file for bankruptcy and it is the only option for them that seems feasible. Now-a-days due to the poor economic scenario bankruptcy has become a common phenomenon. As per the federal laws bankruptcy is designed to help the individuals who are deep stuck in debt. Liquidation and reorganisation are the two different types of bankruptcy. The chapter 7 denotes liquidation bankruptcy while chapter 9, 11, 12 and 13 are for reorganisation. The process in a bit complex and to understand it completely, individuals must seek professional help from the bankruptcy lawyers.

The tax collection process is triggered by the Internal Revenue Services or IRS, sending three consecutive letters, if the first and second letter is not responded to. Later, the IRS authorities contact the defaulter on phone or they send their representatives to have a one on one conversation with the defaulter. The officer who contacts the defaulter is basically the revenue officer; he contacts the relatives, friends, business associates, employers, colleagues and co-workers of the concerned person and find out the ways of tax collection.

There are many companies who help defaulters in finding out the better ways of tax payment. These companies have specialised professionals who already have the experience of working with the IRS. Before offering their suggestions, the debt relief officers understand the defaulter's actual financial condition. By using the guidance and knowledge of these professionals, the defaulters can save their properties. The bankruptcy lawyers negotiate with the IRS agents as a result of which the defaulters sometimes get more time for payment or they are able to save their properties. Sometimes, if the tax lien is already imposed, the professional representation might help the defaulters in releasing the same.

Sunday, November 11, 2012

In This Economy the Best Career Choice Is to Be a Bankruptcy Attorney

In today's economy, people are struggling to keep their jobs. It was recently reported that only 24.6% of all jobs in the United States today are actually good jobs. Working at Mickey D's or other fast food restaurants does not constitute a career choice by any means. The unemployment numbers were released in the beginning of August and with no surprise, are worse than the previous month at 8.3%. One thing the government is not telling us is the number of people that have fallen off the radar because their unemployment insurance has run out and they still are not working. Over 51% of Americans are now on government assistance. It seems that the number of Americans filing bankruptcy is soon going to take another rise. The number of Americans filing bankruptcy continued to rise to a high of close to 1.6 million back in 2010. Since then, the numbers have dropped a little or stayed flat. Many experts have been predicting that this might be the calm before the storm.

In this economy we should be instructing our children to go to law school to become a bankruptcy attorney. This is one of the only careers that thrives in a bad economy. Recently, many bankruptcy lawyers have diversified and started defending clients that were in foreclosure. When the foreclosure numbers started climbing back in 2010, attorneys noticed that the banks that were foreclosing warrant even doing diligence to prove to the court who actually was on title of the property. Because of the derivatives market, many loans that were taken out back in the boom time were sold and resold many times over. This happened due to the deregulation of the industry. Many banks could not even prove that they own the paper free and clear, angering the judges causing the bank to lose the property entirely. Now, a foreclosure takes approximately one year from beginning to end as banks are making sure that their I's are dotted in their T's are crossed. Real estate experts are predicting a continued decline in real estate prices nationwide and the economy continues to wallow.

With all this going on this makes it a prime time for young adults in law school to begin practicing as a bankruptcy attorney. This economy will not recover any time soon and over the next 10 years we will see many Americans filing bankruptcy. People having financial trouble should consider consulting a bankruptcy attorney to look at different options. For someone with a large amount of unsecured debt, filing Chapter 7 bankruptcy is King. If it's more about protecting one's property Chapter 13 bankruptcy is probably better. Americans that are buried under a mountain of debt shouldn't wait around until they hit rock bottom, but save any assets they have now by using a bankruptcy filing. Bankruptcy will break the bondage of debt and send the consumer on the road to becoming debt free.

Wednesday, October 31, 2012

An Overview of Bankruptcy Lawyers

Bankruptcy laws are very complicated and it is nearly impossible for any average person to understand them that is why it is essential to hire a bankruptcy lawyer. The bankruptcy laws become more complicated after some amendments that have been made by the court recently. A good lawyer can help you a lot in choosing an accurate chapter of bankruptcy for you.

The bankruptcy lawyers specialize in the rules and laws which are related to the bankruptcy. However, it is also important to know that not every lawyer is experienced in the particular laws of the state. That is why it is highly advised to hire a local lawyer who has some good information about different laws of bankruptcy of your state. The laws of one state can be different from the other. So, before choosing a lawyer make sure that he/she has enough experience of working in your state.

Actually filing bankruptcy is a life changing experience for everyone and lots of emotions are attached to it. Therefore, you want to hire a person who understands your feelings and who also understands that from which phase you are going through. A good and experienced lawyer will exactly know how to handle any kind of fears or concerns of his/her clients.

Your budget is a key element, when filing your bankruptcy. It is very essential to have a perfect understanding of your budget. Generally these lawyers charge pretty high fee for their services. A client is responsible to pay for the actual bankruptcy and these costs depend on the different kind of bankruptcies.

For example the chapter 7 bankruptcy runs around the $350. Then, a lawyer will charge more or less $1000 to $2500. If the fee of the lawyer is too high for you then try to find any other lawyer. But also keep it in your mind that these legal services have some charges and it will be good for you to pay a bit more for a trustworthy and an excellent lawyer.

Choosing a reputable lawyer is very crucial for the results and outcome of your case. No one wants to choose a lawyer randomly and we all know that blindly choosing a lawyer could have some really negative impacts on the final outcome of the case. When picking a lawyer, ask your friends, family and colleagues for the recommendations.

Do not pick any bankruptcy lawyer randomly or at the last minute. Perform some advance research and planning before making any final decision. It is extremely important that you work with a lawyer who dedicated his/her self in this particular field of bankruptcy. If you hire a good lawyer then he or she will make the overall process simpler and easier.

Monday, October 15, 2012

Filing for Bankruptcy - Look Before You Leap

In the event of unpaid debts, it is advised to call or e-mail law firms, before attempting any desperate measures such as raiding one's retirement plan, transferring property, or transferring credit card balances. One must consult bankruptcy lawyers, before making such hasty decisions.

Make sure that experienced bankruptcy lawyers are contacted if one has been sued or if there remains a pending judgment. Once a judgment has been issued, the underlying debt becomes a secured debt and can be paid off by seizing bank accounts, garnishing wages or seizing property.

Note that bankruptcy is not a good solution if one is elderly and/or has no assets that a creditor could garnish (social security wages, as an example) or seize. Even if one has non-exempt assets and debts such as student loans, an Atlanta bankruptcy attorney always advises not to file for bankruptcy.

It should be known that bankruptcy for individuals if of two types- Chapter 13 and Chapter 7. A Chapter 13 bankruptcy is also referred to as a "wage earner's plan." In this scenario, debts can be paid off over a period of 3 to 5 years by individuals without paying any interest on payment towards debt. One cannot be sued while using the Chapter 13 plan and even does not need to sell its properties or assets to make payments. However, Chapter 7 is a liquidation bankruptcy, which helps the individuals to pay their unsecured debt in an efficient manner. Homes are seized only when it is currently not on mortgage payment, and even then one can work with Atlanta bankruptcy attorney to modify these payments outside of the bankruptcy case.

Filing for bankruptcy is not the only mode of making debt payments. It is important to decide which mode to select, based on one's ability to pay. One of them is loan modification. The bankruptcy lawyers can help negotiate with the lenders, to lower car and home payments, and also prevent foreclosure. Another mode that can be considered is debt settlement. When there is simply not enough balance on one's credit cards or medical bills to cover the cost of bankruptcy, debt settlement is an alternative. However, it is important to be careful of companies that claim to take certain items off one's credit report, as they are scams. Sometimes, debt settlement ends up being ineffective, as one ends up paying a part of the lowered payment to the debt settlement company every month, for "negotiating."

Sunday, September 30, 2012

Filing for Bankruptcy Before, During or After a Divorce

At certain times in life, one bad thing leads to another. This seems to be the case when it comes to bankruptcy and divorce, with the two sometimes being inextricably linked. Whether it is financial problems that lead to marital discord, or it is the divorce itself that brings about unsustainable financial obligations, knowing what to do in this difficult situation is essential in keeping your current quality of life.

The sad reality is that both have the very real possibility of influencing each other and can present major problems if not approached in the proper manner. Understanding your options before, during and after a divorce can keep you from being dragged into a financial-legal crisis.

Prior to Divorce

In an ideal scenario, the bankruptcy filing will be handled prior to the divorce proceeding. This will enable the two parties to mutually decide how to divide their assets in the most equitable manner possible, while also deciding the debt burden that each is obligated to assume.

As long as the parties are still married, they are able to file a joint bankruptcy petition, even if they are separated at the time. This process will usually only work when the parties are able to cooperate with each other and with their attorney. The most beneficial aspect of filing before is that the divorce can proceed with the issue of marital debt having been fixed. This should allow for a more amicable and fair settlement.

During Divorce

Dealing with the bankruptcy process in the midst of a divorce has the potential to make a complicated process even more difficult, but may in fact be necessary, depending on the situation.

Whether one or both spouses in a divorce should file for bankruptcy depends mostly on the amount of debt in each party's name, along with whose name the marriage assets are titled. These assets include houses, cars and financial accounts. Discharging the debt of one spouse, while saddling the other spouse with high levels of money owed, does not fix the overarching issue of who must pay for the remaining marital debts.

Once the spouse files for bankruptcy, the bankruptcy court will issue an automatic stay. This disables creditors from continuing to try to collect any outstanding debts that have yet to be paid. The automatic stay also prevents the divorce court from moving forward.

Similarly, the divorce court will be unable to divide property between the spouses until the bankruptcy court has made a determination of which assets are exempt from the bankruptcy. It must be noted that exempt property cannot be sold by the trustee to pay off debts.

Post Divorce

Some formerly married individuals may choose to file for bankruptcy after the divorce with the intention of getting rid of some or all of the debts they were required to pay as part of the divorce order. Specific types of debts, however, are not dischargeable in either a Chapter 7 or Chapter 13 filing. This generally has to do with support obligations, which include child support and alimony. These types of obligation MUST be paid.

Property settlements may be dischargeable in certain scenarios. Non-support obligations, like the money owed in a property settlement, are not dischargeable in a Chapter 7 bankruptcy, but may be in a Chapter 13 filing. This is unless the court finds that the money owed is in fact a support obligation.

For those worried that their spouse will file for bankruptcy after the divorce is finalized, there are some protective options that they have in regard to this. These include indemnity agreements, property lien's, support obligations and title changes on joint debts.

With an understanding of what can be done before, during and after a divorce when it comes to filing bankruptcy, you will be certain to approach this complicated situation in the most efficient manner possible.

Thursday, September 13, 2012

Rebuilding After You've Filed for Bankruptcy

There are few experiences as traumatic and stressful as declaring bankruptcy. However, bankruptcy is not the end of your financial life; it can also be a new beginning. Though a bankruptcy can result in a bad mark on your credit report, it can also provide the opportunity to rebuild your credit and financial health. Using these steps, you can start anew after bankruptcy and secure for yourself a healthy financial future.

Evaluate How You Got into Bankruptcy 
There are many reasons that can cause an individual to declare bankruptcy. Some financial issues might be out of your control, such as medical bills, law suits, layoffs, or divorce. But there other factors that can lead you to bankruptcy or make you more susceptible to bankruptcy that can be managed. You might have to ask yourself some tough questions as you evaluate your path to bankruptcy. Maybe credit card companies seduced you with the promise of easy credit, but then hit you with high interest rates. With the enticement of credit cards and their "easy monthly payments" you can very quickly find yourself in big financial trouble.

Another cause of bankruptcy can be a lack of emergency savings. Many folks fail to create a financial plan that includes setting aside a percentage of their income that can be accessed in the event of a layoff or emergency. Some people get in trouble by buying more house than they can afford, and when a financial crisis occurs, find themselves burdened with a mortgage payment larger than their income. Whatever the cause, take some time to evaluate what happened, and see if there are any steps you can take to avoid problems of the past.

Make a Spending Plan 
A spending plan is simply deciding what you are going to do with your money before spending it. By writing down your income and expenses, you can get an idea of where your money is going. That way, you can decide ahead of time whether to go out to lunch or bring it to work with you. On one hand, a spending plan gives you the ability to say "No" to buying something you don't need. On the other hand, a spending plan also gives you the freedom to buy something guilt-free because you know you have the money to make the purchase. And don't forget, when you cash your paycheck, the first person you should pay is yourself. The old adage of saving money for a rainy day has a lot of truth to it. Setting aside a percentage of your pay in a "Just in case" account is a simple and affordable means to be prepared. Bad things happen to good people. And it might have been unexpected expenses that caused your bankruptcy. However, an emergency fund just might help mitigate some of the effects of future emergencies or setbacks.

Rebuild Your Credit 
It is no secret that bankruptcy is a black mark on your credit report. But credit scores can be rebuilt. And it is important for your financial future to repair your credit. After you have made your spending plan and know that you can live by it, consider getting a secured credit card. This is a card that is secured by a cash deposit you make. Even though a credit card can get you into trouble, it can also be a tool to improve your credit score. By using this secured card to make small purchases and paying off the balance every month, you will show that you are a good credit risk, and your credit score will start to rise. Even if you plan to never borrow another dollar, you need a good credit score. Your credit score affects things such as your insurance rates, whether you can get a cellular phone, and rental applications.

Ask a Bankruptcy Attorney 
As you go through the process of your bankruptcy, speak with your bankruptcy attorney about resources that you can use to get a fresh start.

There are organizations in Mankato, Minnesota that can help you with secure your financial future.

Friday, August 31, 2012

The 5 Stages of Grief When Facing Bankruptcy

In the U.S. approximately 1.5 million total bankruptcy filings were reported in 2011. If you were NOT one of those 1.5 million then congratulations! If you were then you are not alone. With people still struggling financially from a down economy and a 7.8% unemployment rate as of Sept. 2012 it's becoming more evident that we still have a ways to go before we see any signs of relief.

Facing bankruptcy can be a stressful experience for any family or business to go through. The emotions and anxiety can be overwhelming. These are all normal feelings and can be defined. The grief that people encounter can de described in stages. While some may grieve differently, it's safe to say that they will experience some of the stages defined below.

They are:


Denial is usually the first stage of grieving. It helps us to survive the loss. In this stage life seems to make no sense, they are in shock or tell themselves this just can't be happening, especially to me.


Anger is a way to shift the problem by blaming someone something or the system. It is a necessary stage of the healing process. It's vitally important to control your anger. You will get through this. Remember you have options and there is help out there.


Help me God! This is a desperate shout out for the Lords help. Bargaining with the higher power for help and prayer are usually high at these times of hardships. Telling yourself "what if" or if I just did... "I will never do that again" statements.


Depression usually follows bargaining with a deeper level of grieving and empty feelings. It is a way of dealing with loss. It's important to talk to your spouse and loved ones for support.


Acceptance is a stage that is the reality that we have a problem. We accept it for what it is, learn to live with it. We may still feel bad about the situation, but we move on and take the next step. What to do about it? How do we fix it?

Well rest assure there is hope out there. Finding a qualified and experienced bankruptcy attorney can relieve a lot of your anxiety and can offer hope. There is legislation in place to help people just like you. You are definitely not alone here. Finding a bankruptcy lawyer who is designated by Congress as a debt relief agency offering bankruptcy relief, and protection will give you a clear picture and an accurate assessment of your situation.

A bankruptcy attorney can provide advice on the benefits of filing for relief under the Bankruptcy Code where most, if not all, of the debt may be discharged in as little as four months.

However, being able to petition for bankruptcy is not automatic. The Bankruptcy Code requires that a person, or a couple, filing for bankruptcy meet certain conditions. It is advisable to have an attorney prescreen your qualifications, and see if you may be eligible to file for bankruptcy.

Tuesday, August 14, 2012

Steps on How to File Your Own Chapter 7 Bankruptcy Case

- Is Bankruptcy right for you?

The first step in this process is to make an informed decision on whether Chapter 7 Bankruptcy is the best option for you. Many attorneys will offer free consultations to evaluate your situation and make an assessment of all of the options available to you.

There is also plenty of good information on the web that might help you make an informed decision.

-Get your Credit Reports

If you have made an informed decision to file a Chapter 7 bankruptcy case the first step is to get all three of your credit reports from the 3 major credit reporting agencies. You get these credit reports by Googling "annual credit report" and following the link.

Now that you have all 3 reports be sure to print them out because you will be using the information on them to prepare your bankruptcy petition.

-Look for Judgements against you

The next step is to go to your local court system website and search your name to see if there are any unpaid judgements against you. This is important because you will be listing these judgements on your bankruptcy paperwork and in effect wiping them out. Be sure to check all the different courts in your county as well as any other places you have lived in the past 20 years for judgements. Print out any judgements against you including the amounts, the case number, the plaintiffs name and address, and the plaintiff's attorney's name and address.

-Filling Out The Bankruptcy Petition and Paperwork

Now that you have gathered all of you past debts and information, you are ready to start filling out all the necessary forms. You have a couple of different options when it comes to the forms.

The first option is to use the forms on your local US Bankruptcy Court website. The better option is to use an online bankruptcy software program. Don't worry the software is very cheap to use ($39). It is also very easy to use. The forms are all current and comply with the bankruptcy laws. is a good one to use.

Now you will just be typing in all of the personal information and financial information that you gathered. The software will guide you through the process and populate all of the information in the proper bankruptcy forms. Once you complete that process, you will print out all of the completed forms. Make sure your printer has plenty of ink because the total package will be about 60 pages.

-A Word about Income Taxes

If you have back income taxes that you owe consider this rule. The general rule is that you can list your taxes on your Chapter 7 Bankruptcy if the taxes owed are from a previous tax year and you have filed your tax return more than 2 years and a day prior to the filing of your bankruptcy case. That's just the general rule. Back taxes and bankruptcy raises many issues and you should consult the "nolo" website or an attorney if you are unsure how to proceed.

-The Local Rules

Make sure to go to your local US Bankruptcy Court website and look at the "local rules" section. It will tell you if any local forms are required with your filings, and will have templates. It will also tell any special requirements they might have as to the papers themselves(ex. the Arizona district requires all of your form be double hole punched).

Tuesday, July 31, 2012

FRE 803(B)(6) and How Can Consumer Prevail in Debt Collection Litigation

You may have heard of or even know someone who has had their wages garnished by a collection agency; and you may wonder, "Can they even do this?" The answer is yes, but not without a court order. Every year, collection agencies are inundating courtrooms with thousands of lawsuits filed against debtors. This situation is somewhat unfortunate for consumers for two reasons. One, delinquent accounts reach collection agencies because the original creditors have already given up hope of obtaining payments and have decided to abandon them. Two, although collection agencies have purchased the accounts for a fraction of the cost, they are pursuing consumers for the full debt amount. Invariably, they win in court because uninformed consumers do not attempt to fight the claim. They are also unaware that collection agencies are relying, improperly, on Federal Rule of Evidence (FRE) 803(b)(6) to introduce evidence in support of their claim.

First, let's clarify that there are different stages in the process of debt collection. For example, when a consumer stops making payment, the original creditor may initially rely on its internal collection department or may contract with a third-party agency to collect payment on its behalf. In both cases, the original creditor still owes the bad debt. There comes a time, however, when the company will lose hope of obtaining any more payments. It will then make a business decision to close the account and write off the remaining debt balance. When a "charge off" is recorded, the company can claim a tax loss on the unpaid balance and the customer will see a negative notation appear on its credit report, regardless of whether the debt is later paid off or not. Accounts that have been closed are sold to "debt buyers" for a fraction of their value. In fact, it is not rare for collection accounts to be bought and resold multiple times. One must realize that at that point, consumers no longer have any contractual obligation toward the original creditor (who no longer owes the bad debt). However, they are now left to deal with collection agencies.

Of course, "debt purchasers" will go to great lengths to pursue payments. If they believe that customers have funds, they may start legal proceedings to obtain a judgment and a court order for wages garnishment. Be aware that agencies need proof that they properly served consumers. Proper service notifies consumers that a claim has been filed against them so that they can defend it in court. Failure to properly serve consumers will result in a judgment that can later be voided.

Too many times, consumers ignore a legal complaint because they are either scared or do not have the means to hire counsel. And so, they fail to take action, hoping the problem will go away. This is the worst approach consumers can take because collection agencies will automatically win the judgment. So, an answer to a complaint always needs be filled out in a timely manner. As defendants to a lawsuit, consumers should not admit any allegations made in the complaint but instead should request proof of what is being alleged, especially proof that the collection agency now owes the account. After all, consumers never entered into any contractual agreement with the collection agencies. They often don't know which companies have purchased their account, let alone the fact that their account was even purchased in the first place. In addition, as mentioned before, accounts are often sold multiple times; and sometimes documentary evidence of debt assignment may have been lost. This fact alone is sometimes sufficient for collection agencies to drop the lawsuit.

If the case goes to court, consumers should not fear that the burden will be placed on them to answer incriminating questions. Indeed, in our legal system, the party who initiates the lawsuit has to prove its case first. Essentially, the collection agencies need to establish that they are now the party to whom customers owe the debt. So in theory, they would need to present evidence that the original creditor sold them the account, or, if the account was purchased and sold multiple times, evidence of the entire chain of debt assignments. Although business records are hearsay, they can be admitted as evidence - as an exception to the hearsay rule under FRE 803(b)(6) - on the condition that a record custodian employed by the company comes to court, identifies the documents and testifies from them. However, be advised that a record custodian can only testify from records generated by his or her place of employment, and not from those generated by another business entity. Is this important? Absolutely, because it means that the record custodian that will be present in the courtroom cannot testify from documents that have been prepared by the original creditor or the previous collection agencies. When the custodian is not allowed to introduce, as evidence of debt assignment, documents prepared by the original creditor, she cannot prove that the collection agency owes the account.

Thursday, July 12, 2012

Hiring a Bankruptcy Attorney Pros and Cons

A bankruptcy attorney is a legal professional who focuses mainly on counseling and guiding his clients regarding their financial states. He basically plays an important part in giving advice to the person in a financial crisis. The advice and counsel revolves around what type of bankrupt state the person can claim as well as what properties are exempt in this state. The filing of the claim can also be quite confusing for many of those who are not familiar with the terms and the systems that are necessary in doing so in the courts. The lawyer can step in and extend help for those who have some difficulty understanding the system and organizing their thoughts about their financial status. Despite being very good help to those who are in financial crises, there is also a downside to hiring one.

Pros and Cons

The pros and cons of hiring a bankruptcy attorney are various. It should be mentioned, though, that the downside to hiring one is not as heavy as the upside of doing so. One of the good things about getting this type of legal representative is that they actually focus on the different aspects of the state of being bankrupt. They know all about the different other fields of laws that are related to this state and they can advise the client regarding which state is better to claim. In other words, they are experts of this in the financial law concept. In this regard, they know what can be expected if their client pursues an avenue of law that is connected to this. Yet another good thing about hiring these lawyers is that they can actually assess the individual's status and counsel the person whether it is a good idea to declare oneself as bankrupt or to pursue another avenue related to this. The bankruptcy attorney can recommend some actions and alternatives which may prevent the individual from actually declaring this state of financial crisis. There are some ways to actually ask the people who hold the debt to extend the loan or give some kind of consideration to the person who owes money. Some credit card companies allow for arrangements to be set in order for the debtor to pay off the debt slowly but surely.

The downside to hiring a lawyer of this caliber is that they can be an additional cost to the already broke individual. Legal representation and counsel do not come cheap and some of these professionals can ask for top dollar for their services. There are some who allow payment for their services to be broken down but this just means that the person who is in a financial crisis has another additional debt to pay. The bankruptcy attorney might also be in a hurry to file the claim and not assess the case well enough to consider other options. Some of these professionals might take the case at face value and just go through the easiest course even though there are other alternatives.