In the years following the Great Recession, consumer debt has steadily risen. Even as the economy has recovered a little bit here and there, our household debt has a way to go in terms of catching up. We’ve lost a job and it’s still been hard to find a new one. We have medical bills that are impossible to pay, credit card debt that continues to mount, or our homes are about to go into foreclosure. With family members struggling just as equally, it can seem like there’s nowhere else to turn. However, we do have options. Bankruptcy may be one of them. Learn more about consumer debt and bankruptcy from the National Bankruptcy Forum.
Tax Consequences of a Short Sale; the Bankruptcy ‘Cure’
Unlike Most Forgiven Debts, Debts discharged in Bankruptcy are not taxable events While the housing market was in turmoil, many were looking to a short sale as a way out from under a house that was rapidly declining in value. A true short sale or deed in lieu of foreclosure involves a forgiveness of debt….Read more
Income Taxes Cannot be Included in Bankruptcy, Right?
Including Income Taxes in Bankruptcy Wrong, income taxes must be included in bankruptcy regardless of whether they’re capable of being eliminated. Because all debts and assets must be disclosed when you file for bankruptcy, back taxes are a debt owing and are automatically included upon the filing of the bankruptcy petition. They are “included” when…Read more
Our Credit Scoring System is Biased Against Renters
Paying Rent on Time Should Improve Credit Score In theory, a credit score is an accurate reflection of the collective payment history of a borrower. Missed a credit card bill three years ago? Mr. Mortgage Lender will see it. Credit scores take on an important role in underwriting because lenders rely on past performance as…Read more
Chapter 13 Bankruptcy: Advantages and Disadvantages
Most people don’t want to file for bankruptcy at all, but if pressed, will choose Chapter 7 over Chapter 13 every time. After all, who wants to be in bankruptcy for 3-5 years as is required in a chapter 13 case? At first blush, it certainly sounds like a raw deal. Very often I will…Read more
Fruits, Vegetables, Exercise, and…Bankruptcy?
Bankruptcy: the Healthy Choice? If you find yourself deep in debt and are desperately trying to avoid bankruptcy, it might be time for a paradigm shift. Not only does bankruptcy provide relief from debt, it provides relief from chronic stress that can lead to poor health. Constantly worrying about bills and your financial future is…Read more
Can I File Bankruptcy Without My Spouse? Will My Bankruptcy Hurt My Family?
One of the most common questions bankruptcy attorneys receive is: “How will filing for bankruptcy affect my spouse?” The issue comes up most frequently when only one spouse is planning to file for bankruptcy. Many have the mistaken impression that because they are married, their spouse is automatically responsible for their debts. This is not…Read more