Bankruptcy Resource Group

April 24, 2009

How (And Why) To Adjust Your Tax Withholdings, Part II

Filed under: Attorneys, Budgeting, Online resources, Taxes, Uncategorized — Tags: , , , , — C.Welch @ 4:49 am

Yesterday, we talked about why a taxpayer might want to change their W4s to have less taken out.  Today, we’ll cover why you might find yourself in the opposite situation–choosing to ask the government to take out more money next year. That last sentence probably left many of you about ready to call me crazy, but there are some times when this makes sense.  Despite the economic downturn, for instance, some people made more last year than they did in 2007.

When tax time rolled around, these people found themselves in an irksome situation–they had to write the IRS a big check.  To prevent such financial irritation the next year, such taxpayers should adjust their w4s to reflect their new income.

New freelancers often find themselves in a new, confusing world of actually owing taxes.  Since freelance work is usually done according to a contract, payroll taxes are not taken out.  This means that the freelancer has to pay all of those federal taxes him or herself.  One accounting rule of thumb holds that freelancers should save about a quarter of their income for taxes.  Those who meld freelance work and traditional employment may choose to ask their traditional employers to withhold more, to save up for that big tax burden from freelancing.

Tomorrow, in the final part of this series, we’ll talk about other times when taxpayers should check and probably change their W4s.

Top photo by Paul Sapiano.

March 16, 2009

When to File for Bankruptcy

Filed under: Attorneys, Financial News, Rebuilding Credit, Uncategorized — Tags: , , — C.Welch @ 6:23 pm

As the recession deepens, more and more Americans are turning to filing for bankruptcy as a way to alleviate heavy debt burdens.  News outlets across the country are reporting a rise in bankruptcy, and local stations are educating consumers on how to tell if it’s a good idea to file for bankruptcy.

Speaking to WOWT Omaha reporter Jeff Sabin, bankruptcy attorney John Turco explained when bankruptcy is the best option for consumers:  “If you’re already at the bottom, if you have enormous credit card debt, you’re being sued, collectors are calling, and you ask me, ‘how is [filing for bankruptcy] going to affect me,’ I think it’s going to affect them in a positive way, because it’s already terrible.”

Chicago Tribune writer Mike Hughlett recently reported that consumers should seriously consider filing for bankruptcy in the following circumstances:

•If you are regularly dipping into your retirement savings.

•If your wages are being garnisheed by creditors.

•If you see no possibility of repaying your debts (being able to muster only minimum credit card payments is a sign).

•If your house is in foreclosure proceedings.

Turco also offered invaluable advice on when to avoid bankruptcy: “If you’re able to struggle through it and buckle down and cut your expenses and get some extra income coming into the household, then my recommendation is if you can avoid bankruptcy, you should. If it’s not necessary, don’t do it.”

Some events that commonly precipitate a bankruptcy are filing for divorce, medical expenses, and losing a job.

If you’re already a Bankruptcy Survivor, congratulations!  You made it through, and now you have a chance to rebuild your credit.  One way to rebuild credit after a bankruptcy is to make a significant new purchase on credit, and consistently make early payments on that purchase.  Taking out a new automobile loan is one way to rebuild credit.  If you’re looking for a reputable, local auto dealer that specializes in working with Bankruptcy Survivors like you, give Bankruptcy Resource Group a call today.  BRG has a nationwide network of friendly auto dealers who can help you rebuild credit through an auto loan.

Click here for further reading on deciding when to file for bankruptcy.

Top photo by Judith.

February 20, 2009

When will the Creditors stop calling? When they get the disharge.

Filed under: Attorneys, Rebuilding Credit, Uncategorized — Tags: , , , , — C.Welch @ 12:09 am

the red phone One of the most irritating aspects of personal bankruptcy is the nagging calls from creditors. Even if you make it clear that you’re unable to make payments, many lenders continue to call. These calls can lead to constant, nagging stress as you realize just how far in debt you are.

Fortunately, if you’re planning to file for bankruptcy, you can expect the calls to stop soon. How soon? Here are a few tips to remember on how creditors decide when to stop calling.

Following bankruptcy proceedings, lenders are required to stop all collection efforts, including telephone calls.

In legal terms, this is called a discharge. A discharge is the legal method for debt forgiveness following a bankruptcy. Once the judge puts a discharge on a loan, the lender is legally barred from seeking payment on that loan. (There are certain niceties and examples, like liens, that we’ll talk more about later.)

After your bankruptcy case, the court mails notices to all of your lenders. These notices inform the creditors that they must stop collecting on your debts, since you have filed bankruptcy. It can take a couple of weeks for all of these notices to be received. If an especially annoying collection company is getting on your nerves, ask your bankruptcy lawyer to contact the company and tell them that you’ve filed for bankruptcy. If the collector continues to hound you after they’ve been informed of your bankruptcy, they could face legal fees or court sanctions.

Bottom line: you may have to wait a couple of weeks for the calls to stop, but they will end after your bankruptcy. Once they do, be sure to maintain healthy spending habits like tracking your expenses.

Even though you probably came to detest those credit companies, it’s likely that you’ll be needing their help again sometime in the future. To get credit for larger items later, you’ll need to start rebuilding your credit after your bankruptcy. One great way to do this is to buy a car on credit. By making regular, on time or early payments on a car, you’re telling the credit agencies that you’re a responsible consumer who deserves a higher credit rating. After a few years of this kind of behavior, the credit agencies are usually happy to agree with your message.

Bankruptcy Resource Group can help set you up with a local dealer who specializes in working with people after a bankruptcy. Apply today to tap into their web of friendly auto dealerships.

Via FindLaw & CreditInfoCenter


Top photo by Nicolas Nova.

February 9, 2009

What qualifies as an asset in personal bankruptcy?

Filed under: Attorneys, Mortgages, Taxes — Tags: , , , , , , — C.Welch @ 5:45 am

415534472_6ed594a861_mFiling for personal bankruptcy is a good idea for consumers who can’t keep up with the bills. If you’re wondering whether bankruptcy is a good idea for you, read our article to help you decide. As you prepare your files for filing for bankruptcy, you may have questions about common terms.

One term that will come up frequently as you move through your bankruptcy proceedings is asset. In simple terms, an asset is anything of value that is owned by an individual or business. Depending on your state of residency, you may be required to allow the judge to use property and other assets to pay off your debts. There are two categories of assets: tangible and intangible. Nearly all of the assets listed in a personal bankruptcy case will be tangible; intangible assets, like goodwill, copyrights, and trademarks, are generally carried by businesses. For your reference, here’s a list of common assets.

  • Your house. If you’re paying off a mortgage, your house could be the largest asset on your books.
  • Your car. Even if you’re still paying off your car, it is considered an asset by the court.
  • Cash, savings accounts, and checking accounts. Even though you may not have much in these accounts if you’re going through a bankruptcy, their contents are considered assets.
  • Other property. Real estate holdings, material goods, and sometimes even edibles may be included in your list of assets.
  • Stocks and other investments. Savings bonds, stocks, mutual funds, and other investments are assets.
  • Amounts you are owed. As we recently discussed, even your tax refund may be considered an asset, as it is an amount that the government will pay you.

To be sure you’re including the right assets, and keeping as many as possible for life following your bankruptcy, find a good bankruptcy attorney.

And if you’ve already emerged from your bankruptcy, and are looking for an easy way to obtain new assets, give Bankruptcy Resource Group a call. They can help you find a local car dealership that specializes in helping consumers who have been through a bankruptcy.

Top photo by PAM.

February 6, 2009

Exempting Tax Refunds from Bankruptcy Proceedings

Filed under: Attorneys, Mortgages, Taxes — Tags: , , — C.Welch @ 8:01 am

If you went through a bankruptcy in 2008, you might be wondering how your bankruptcy could complicate your taxes, and for good reason. The state certainly considers your bankruptcy a significant event. Otherwise they wouldn’t require you to keep it on your record for ten years. Although it’s always a good idea to be careful when filing your taxes, it’s crucial following a bankruptcy. Starting today, Bankruptcy Survivor will examine issues surrounding bankruptcy and taxes.

Some Americans are lucky enough to look forward to a tax refund. If you happen to belong in this elite group, congrats. The government effectively owes you money. In this sense, your tax refund is an asset. And as you know if you’ve been through one, the bankruptcy trustee could decide to use assets may to pay debts.

Some states allow people to “exempt” their tax refunds, meaning that they are beyond the reach of bankruptcy suits. If you’re lucky enough to live in one of those states, you won’t have to give your upcoming tax refund up during your bankruptcy settlement.

We’ll keep digging up information on just which states allow exemptions, and how to file for them, but until then, consult with an experienced bankruptcy attorney to make sure you get to keep the most money for living expenses following your bankruptcy.

If you are up for a refund this year, and you’re considering applying for a car loan, here’s a tip: rather than researching, calling, and being rejected by nearby car dealerships, just give Bankruptcy Resource Group a call. They’ve already built a nation-wide network of car dealerships that specialize in working with people who have been through bankruptcy.

Via JD Supra.

Top photo by Michael Karshis.

January 15, 2009

Can bankruptcy help you? Three questions to help you decide.

Filed under: Attorneys, Budgeting — Tags: , , , , , , — C.Welch @ 7:56 pm

2805760593_a80f1978c1_mFiling for bankruptcy is about as much fun as going to the dentist, but just like root canals, sometimes it’s unavoidable. Bankruptcy isn’t pleasant, but it’s often the best—or only—choice you have. Should you file for bankruptcy? Here are a few questions to help you decide.

1. What do my friends and family members say? Filing for bankruptcy shouldn’t be taken lightly or done without extensive reflection. Your life will change after a bankruptcy. Lenders, credit companies, and mortgage officers will treat you differently once they see you’ve been through bankruptcy, even if it was the smartest choice you ever made. So be sure to talk about it with your most trusted confidants. This initial conversation might be awkward, but you’ll appreciate their support during and after your bankruptcy proceedings.

2. Have I reviewed my budget? Studiously track your spending for a week to see where you can cut down on expenses. Review your liquid assets, debts, and major expenses. Can you create a sustainable budget? If so, follow it for a month and reassess. If you’re still scrambling to pay major bills, meet with a professional, like a bankruptcy attorney.

Here are a few additional sub-questions to help you determine if you should meet with a professional:

  • Are you making only the minimum payment on your credit cards each month?
  • Are you using your credit cards to pay for necessities, such as food and medicine, because you don’t have the cash?
  • Are you using your credit cards to get cash advances for normal expenses?
  • Are you making your monthly payment after the due date?
  • Are your credit card balances more than your liquid assets?

If you answer yes to two or more questions, it’s time to get help.

3. What does my bankruptcy attorney say? Bankruptcy lawyers often say their clients come to them when it’s too late. Don’t delay in meeting with a professional, who will be able to help review your accounts and determine if bankruptcy is the best option. Rest assured that these professionals won’t judge you– after all, they’ve probably seen far worse. And don’t worry about initial fees—many bankruptcy firms offer free consultations. (See the links to the side for lawyers in your state.)

If after all of this you’ve made the decision to file for bankruptcy, be aware that you’ll need to rebuild your credit afterwards. Bankruptcy Resource Group can help by connecting you with a nearby auto dealership that specializes in providing auto loans to people who have filed for bankruptcy.

Via Bankruptcy Law Network.

Top photo via Flickr creative commons.

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