There is one area of an individual’s finances that really peeves bankruptcy lawyers, and that’s their taxation returns. You can only file for a Chapter 7 petition for bankruptcy if your tax returns are all up to date. It’s not unusual for a bankruptcy attorney to send a client to the local tax office as [...]
When a debtor is underwater, they will often try a number of avenues before facing bankruptcy. Sometimes, those avenues work and the debtor is saved from the perceived loss of face through bankruptcy. Some of the methods used do come with side effects that debtors need to be aware of. They also need to be [...]
Did you know that forgiven debts are considered income by the IRS? Because they are classified as income, they are also taxable. This means that a debt of $10,000 that has been ‘forgiven’ is considered to be unearned income and so subject to taxation. The IRS put it very simply: If you owe a debt [...]
