Dallas Fort Worth Bankruptcy Attorneys
Bankruptcy can be an intimidating option for many people. Although filing for bankruptcy is often attached to a negative social stigma, it can be a great option for those in need of financial protection.., Bankruptcy remains a reasonable legal option when debt begins to accumulate at overwhelming rates. Due to the many questions that may arise when contemplating filing bankruptcy, we have answered some of the most common questions to help you understand the benefits of bankruptcy in a time of need.
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Dallas Bankruptcy FAQ
I’m considering going with a debt settlement company instead of filing bankruptcy. Why should I go with bankruptcy?
Debt settlement programs rarely work as advertised and forgiven credit card debt is treated as an income by the IRS so, you might end up having to pay taxes on it.
Bankruptcy can help reduce or eliminate penalties and interests associated with outstanding tax debt.
With bankruptcy, discharged debts have no income tax consequences and it is excluded from gross income. With other debt relief programs you risk the possibility of receiving a tax bill after your debt has been canceled, but that’s not the case with bankruptcy.
I know I’m going to owe the IRS if I file my taxes so I am considering not filing this year because I can’t make the payments. Is it okay if I don’t file?
Without doubt you should still file your taxes. Even though you aren’t able to make payments, filing your taxes and not paying immediately will put you in a much better position than if you don’t file at all.
Taxing authorities must immediately stop garnishing your wages as soon as they receive the notification of bankruptcy, no matter the type of tax that you owe.
In some cases with Chapter 7 bankruptcy, people suffering severe debt will sell a number of assets in order to pay certain creditors as much as possible. In other cases, these types of bankruptcies are labeled as “no asset” bankruptcies. This means it is not required for assets to be sold during the process. Chapter 7 bankruptcy is useful to become free of some debt and in order to pay off portion of principal balances of unsecured debts. Unsecured debts might be matters such as credit cards and medical expenses.
Oftentimes, people who have experienced a long interval of unemployment will file for Chapter 7 bankruptcy. These unemployment cases might be the result of medical issues that prevented persons from working. Furthermore, people with fewer assets might find Chapter 7 bankruptcy more beneficial.
Chapter 13 bankruptcy reorganizes a person’s debt into a manageable payment plan. Most often, these payment plans are scheduled into three- or five-year plans. On average, Chapter 13 bankruptcy is easier to qualify for. In addition, this type of bankruptcy allows for a person to keep assets such as homes and cars.
Chapter 13 bankruptcy is also referred to as a “wage earners” bankruptcy since it is designed for persons who have a regular source of income. Therefore, a person who receives a normal income might file for this type of bankruptcy.
Due to the complexities of such a matter, it is important that individuals considering bankruptcy seek experienced legal advice as soon as possible. The Dallas bankruptcy lawyers at Allmand Law Firm, PLLC understand the stresses that come from bankruptcy worries and concerns. For this reason, our bankruptcy attorneys are available to help you and your family achieve financial freedom. Here at our firm, we do not believe that bankruptcy defines a person.
We work hard to show you the various options that are available for your specific needs and will stand by our clients throughout the entire process.
To discuss your case,contact our firm today! You are not alone. Allmand Law Firm, PLLC is here.