Bankruptcy Resource Group

April 30, 2009

The Official Court Costs of Bankruptcy

Filed under: Personal Bankruptcy Information — Tags: , , , — C.Welch @ 5:15 am

The prospect of personal bankruptcy frightens many consumers, but sometimes bankruptcy is necessary.  When your credit card payments, auto loans, and other debts pile up until there’s no feasible way for you to pay them, bankruptcy may be your best option.  A recent article in The New Yorker magazine highlighted the history of the treatment of debtors. Until fairly recently (1831), debtors in many parts of the world were imprisoned. Sometimes, these prisoners were held for very small sums–one survey of New York prisons in the late 1780s found that more than 60% of debtors owed less than twenty shillings (less than a dollar).

Fortunately, today’s system of personal bankruptcy provides a far more rational, fair way to deal with overwhelming debt.  Still, many consumers may be unsure how much filing for bankrupcty actually costs.

The official court costs for filing for bankruptcy are low:

Chapter 7 - $200 ($170 filing fee + $30 noticing fee)

Chapter 13 - $185 - ($155 filing fee + $30 noticing fee)

Still, keep in mind that filing for bankruptcy usually includes other fees, such as for lawyers.  We’ll discuss other costs involved in personal bankruptcy tomorrow.

Until then, if you’re on the other side of bankruptcy and looking for ways to get your credit score up, why not take out an auto loan?  Goodness knows the Big 3 could use it.  Contact Bankruptcy Resource Group today to be connected with a auto dealer near you who specializes in working with people who have been through a bankruptcy.

Source

April 26, 2009

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

Filed under: Budgeting, Taxes — Tags: , , , , — C.Welch @ 11:19 pm

2365051048_c2349e4091_mTo wrap up our series on when, how, and why to adjust the amount withheld from your taxes, here’s a list of major life experiences which justify a review of your w4.

Marriage. If you’ve recently been married, you should definitely review your W4. Married couples are typically listed in a separate tax category because they get certain unique taxes and deductions.

A New Child.  The IRS also places parents in a special tax category.  Children and other dependents qualify you for certain deductions.

The Purchase of a Home.  Have a new mortgage?  Then you’re probably in the minority of tax payers who can actually tale advantage of historically low real estate values.  Buying a home also qualifies you for certain exceptions, so be sure to review your W4.

As mentioned in previous posts, you should also change your W4s if you have experienced or expect a big change in income this year.

Top photo by Teresa.

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.

April 23, 2009

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

Filed under: Family Finances, Financial News, Online resources, Saving Money, Taxes, Uncategorized — Tags: , , , — C.Welch @ 7:19 am

It may be challenging to rush through new hire forms these days, since new positions are so few and far between. Still, even if you’ve been in your current position for many years, it’s a good idea to review your tax withholdings for the next year.  There are several reasons to adjust your withholdings, as Bankruptcy Survivor will outline over the next few days.

Today’s situation can be bittersweet for the tax payer.  In years when you worked less than expected, you can actually get a tax refund.  After realizing that you could have used that extra money during the year, you may be hoping to adjust your taxes to have less withheld.

Adjustment Situation #1: You Got Money Back, and You Want To Keep More In Your Pocket.
As The Sacramento Bee recently reported, many Americans got money back from the government this year, due to the slumping economy.  (Hey, at least if you got laid off, you made less than last year, so you get a little refund!  Woopee.) Legally, you’re required to withhold 110% what you owed on the previous year’s income.  If you earnedless this year, and anticipate making around the same amount last year, you can fill out your w4s accordingly and keep more money in your pocket.

In addition to having more liquidity during the year, having less money withheld in a situation like this offers a few benefits.  First, you may be able to earn interest on the money before handing it over to Uncle Sam.  If you keep that extra money in a safe investment with low but consistent returns, you can make money on your tax payment cushion.  (This sort of approach works best for those who know they’ll be able to handle a slightly larger tax figure than expected, as your estimate may be low if you make more money than you anticipate.) The MoneyTalks video here explains in more detail.

Top photo by Paul Keleher.

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