Articles Posted in Bankruptcy

Man Looking at ComputerWhen you owe tax money to the federal government, there are certain collection methods that are unique to the IRS. The federal government is permitted to take more extreme measures to collect money than typical debt collectors. These measures can include placing liens and levies on your property. If you are facing an IRS lien or levy, contact a Jacksonville bankruptcy attorney to learn about your options. Liens and levies have different consequences for your financial future.

What is a Federal Tax Lien?

If you fail or neglect to pay a tax debt on time, the federal government can make a legal claim on the property you own. This claim is called a tax lien. Your property basically becomes collateral to insure the debt that you owe the IRS. A lien includes all of your property for the amount of the tax liability. This includes real estate, savings accounts and other personal assets. A lien is publicly recorded and will have a negative impact on your credit report.

A computer with bankruptcy and debt counseling website openBefore filing bankruptcy in Jacksonville, you’re required to complete credit counseling. The Federal Trade Commission states that you must complete this credit counseling from a government approved agency within 180 days of filing. You must also complete a debtor education course after filing in order for your debts to be discharged.

Why is Credit Counseling Required?

The main purpose of credit counseling is to help you evaluate your financial situation and ensure that bankruptcy is a last resort. Through counseling, you’ll determine if there’s a feasible way to handle your debts outside of bankruptcy without increasing what you owe.

a gavel on a bankruptcy court benchMany people worry about what happens after they make the decision to file for bankruptcy. While preparing your paperwork is half the battle, it’s important to be prepared for what occurs after you’ve signed your petition. Here’s what you can expect after filing bankruptcy.

The Automatic Stay is Put in Place.

An automatic stay is a federal court order that goes into effect the moment a bankruptcy case is filed. It prevents creditors from making any effort to collect on debts you owe. You’ll be assigned a case number by the court, which you should give to any creditors that try contacting you. If they persist, they will have to answer to the bankruptcy court.

a pile of credit cards including visa and mastercardThe primary reason people file for bankruptcy is to get rid of their debt and have a fresh start. But while many of your debts will be discharged in bankruptcy, some debts may remain after filing. Read on to learn more about how to reduce debt by filing for bankruptcy.

Debts Not Discharged with Chapter 7

When you file Chapter 7 bankruptcy, many of your debt will be discharged. There are some debts, however, that will not be wiped out. Some of these debts may be subject to denial or successfully objected by the creditor. Others are never dischargeable, meaning that they fall under a predetermined list of non-dischargeable debts. These include:

one woman whispering a shocking secret to anotherMany people are concerned with the negative stigma that surrounds bankruptcy. They want to know who will find out if they decide to file. While a bankruptcy is publicly recorded, typically only creditors or bankruptcy attorneys will actually view this information. You probably shouldn’t worry too much about your friends, neighbors, or others in your social circles finding out.

What’s Included in My Bankruptcy Record?

The information on file will include copies of any documents related to the filing. Values of assets, creditors’ claims and information on any funds exchanged in the process will be listed. It will also include notes about meetings and phone calls.

a series of legal textbooks about trustsWhen filing bankruptcy, you’re probably concerned with safeguarding certain important assets. Will establishing a trust protect your assets from creditors? The answer will depend on several factors, including the type of trust you have. There are two types of trusts, revocable and irrevocable. Below we’ll discuss the purposes of each and how they apply when you’re filing for bankruptcy.

Revocable Trust

A revocable trust, or living trust, is the type of trust commonly used in estate planning. One of its primary purposes is to help your family avoid the stress and costs associated with probate after your death. Any assets included in this trust are not subject to probate court. This saves considerable time and hassle for the beneficiaries of your estate. The assets in the trust will be distributed according to your wishes.

two people attempting to file for bankruptcy on a laptopBankruptcy is the federal court procedure offering a person or business the opportunity to eliminate or restructure their debts. Debts that can’t be paid may be forgiven, and creditors may get some amount of repayment depending on the filer’s ability to pay. Filing bankruptcy in Florida can be a difficult decision, but it provides the opportunity to start with a clean slate.

The Bankruptcy Process in Florida

Most of the bankruptcy process is governed by federal bankruptcy laws. This means that filing bankruptcy in Florida is much like filing in other states. There is some Florida-specific information that you’ll need to submit. There are also Florida exemptions to be aware of. The basic process of filing in Florida follows these steps.

the Jacksonville skyline from across the riverMany clients ask us how a bankruptcy filing will affect their ability to rent a home or apartment. While bankruptcy can certainly make it more difficult to rent, it is not impossible. Potential landlords will take several factors into consideration when renting to you, including past bankruptcies. With some basic knowledge, there are ways you can improve your chances of renting your next home while in bankruptcy.

Renting before filing

If you have not filed yet, you might want to consider doing a pre-bankruptcy rental search. If you know ahead of time that you will need a new home due to surrendering your house in bankruptcy, think about locating a rental before filing. This way, your credit score is not yet affected by the bankruptcy filing and will not disqualify you from getting the rental you are interested in.

a married couple linking arms while sitting
If you and your spouse are contemplating filing for bankruptcy, you may wonder if you are required to file jointly. Married couples can, in fact, file separately. When filing for bankruptcy in Jacksonville, married couples have the following options when choosing to file for Chapter 7 or Chapter 13:

  • One spouse files individually
  • Both spouses file individually

a gavel on a gray backgroundIf you have fallen behind on paying your bills, you may be wondering if you could lose your home. When facing financial turmoil, this is naturally what folks fear most. Fortunately, your home is safe from any creditors who do not have a mortgage or lien on it. Credit card companies and other unsecured loan holders can’t come and simply take your property or home after missing a few payments.

A creditor will first start making collection attempts by mail, phone calls or other methods. If these attempts are unsuccessful, there is a good chance that they will file a lawsuit against you. By doing so, the creditor is hoping to get a judgment which would allow them to transition from being an unsecured creditor a to secured creditor.

A judgment is issued by the court, and it states that the creditor has won the lawsuit and has a right to collect a specified amount of money from you. A creditor can get a judgment against you if you don’t respond to a complaint, don’t comply with a judge’s order, lose a summary judgment motion or lose a trial. Once a judgment has been issued, you become a judgment debtor and they become a judgment creditor.