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Posted on in Income Taxes

San Antonio Bankruptcy LawyerWhat do you do (and not do) if you already owe 2018 or 2019 income taxes, or taxes from earlier years, and haven’t sent in the latest tax returns? What if you owe 2020 income taxes even though the IRS is not taxing $10,200 of unemployment income that year? That was our topic last week. The first $10,200 of unemployment is not being taxed because of last month’s American Rescue Plan Act. This week’s topic covers your options if you owe income taxes for prior tax years. Even if you don’t owe for 2020, or owe less, that may not help much if you were already behind.

If You HAVEN’T Submitted Recent Tax Returns

For tens of millions of Americans, the last year has been the most financially disruptive in their lifetimes. Many lives were turned upside down around a year ago. If that includes you it’s understandable that you had trouble preparing and sending in your 2019 income tax returns.

The IRS recognized this to some extent by extending its tax return deadline from April 15 to July 15, 2020. So did virtually all states with income taxes (which include 41 out of the 50 states). But if your financial challenges went beyond last July, you may still not have made that deadline. Indeed you may not have submitted them even now if you owe and cannot pay.  That may be especially true if you were already a year or more behind on taxes at that point.

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Posted on in Uncategorized

Texas bankruptcy attorney, Texas chapter 7 lawyer, Texas chapter 13 attorney,Although much of the United States seems to have recovered from the Global Financial Crisis, thousands of Americans still declare bankruptcy every year. Although many are familiar with the general implications of bankruptcy, few first-time filers understand the intricate laws and how they relate to their particular case.

To shed some light on this complex legal field, here are four common chapter 7 bankruptcy FAQs:

What Makes Chapter 7 Unique?

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Chapter 13 bankruptcy in TexasFor most people who file bankruptcy, the process is very unfamiliar. Many filers focus on the negative aspects of bankruptcy: its effects on credit, potential loss of assets, and others. What is important to understand, however, is that bankruptcy is not financial suicide; it is an opportunity to save your home, reduce monthly payments, and end harassment from creditors.

Unlike Chapter 7 bankruptcy, which involves the liquidation of assets to pay off debts, Chapter 13 involves the restructuring of debt. The debtor pays “priority debts” first. These include taxes, alimony, child support and any owed wages. After these, car loans and mortgages are usually next. These debts are scheduled into an approved payment plan that takes income and overall debt into account.

Unsecured debts, such as credit cards or medical bills, are often handled last. Depending on whether these can be paid in full, there may be restructuring options available.

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tax lienIt is not uncommon for a person to find themselves behind on their income taxes, and many across Texas and the rest of the country suffer from this same problem. Everyone has seen the proverbial person walking through the door of his or her accountant's office with years worth of paperwork in hand. However, this only generally occurs when they receive notices from the Internal Revenue Service or simply have all of their money frozen.

In many cases, filing for bankruptcy can assist you in your financial predicament with the government. First, you should consult a Texas bankruptcy attorney to assess what is really going on and to find the best way to remedy the problem. In this way, it is critical to understand the key differences between a tax levy and a tax lien.

Consider the following deviations between a tax levy and a lien, and why one is more critical than the other to your short and long term financial health:

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bankruptcy file preparation, bankruptcy in Texas, bankruptcy petition, Chapter 13 repayment plan, credit counseling course, file for bankruptcy, prepare for bankruptcy, San Antonio bankruptcy lawyer, Texas bankruptcy attorney, types of bankruptcyThe best way to prepare for bankruptcy filing is to work with an experienced attorney, as there are strict rules and guidelines for filing bankruptcy in Texas. And knowing what to expect in advance can make the process easier for you.

Failing to file for bankruptcy properly could result in your case being dismissed entirely, so it is worth your time to review filing requirements ahead of time. Bear in mind that you will need to complete a credit counseling course before you can file, so you might want to plan several months in advance.

The first part of your bankruptcy file is your petition. You will also need to submit schedules, a statement of your financial affairs, a debtor statement of intention, a statement of your current monthly income, and a list of up to 20 unsecured creditors. These documents all should be submitted with your bankruptcy petition. Additional documentation to be submitted includes a pro se questionnaire if representing yourself, proof of credit counseling completion, a creditor matrix verification, and a Chapter 13 repayment plan if applicable.

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