Bankruptcy Tax Lawyer

Bankruptcy may seem like the only way out of your bad situation, but it won't get you off the hook with Uncle Sam. Viz.: Generally, when a debt owed to another person or entity is canceled, the amount canceled or forgiven is considered income that is taxed to the person owing the debt. If a debt is canceled under a bankruptcy proceeding, the amount canceled is not income. However, the canceled debt reduces other tax benefits to which the debtor would otherwise be entitled. Additionally, this [information] is not updated on an annual basis and may not reflect recent developments in bankruptcy or tax law. If you need more guidance on the bankruptcy or tax laws applicable to your case, you should seek professional advice. So says the government.

Undoubtedly, it would be a really good idea to have a little hidey-hole where you can stash odd bits of cash until you've accrued enough to pay a bankruptcy tax lawyer for at least a genuine consultation. (You know those ads that say, "Initial consultation free"? It probably is, but no consulting will be done with you as an active participant. You may get to meet the lawyer in question - briefly - and you will definitely have to answer questions about the amount of your debt, income, expenses, and otherwise establish your bona fides. You may even be told what it will cost to retain the services of the lawyer until resolution is reached. (Lawyers aren't moved by tears, though.)

There are two types of bankruptcy, Chapter 7 and Chapter 13. To be eligible to file Chapter 7 bankruptcy, you must qualify under the Chapter 7 means test. This has to do with your income vs. the median income in your state. If yours exceeds the median, other calculations come into play. For people with boatloads of unsecured debt, such as medical bills and maxed-out credit cards, Chapter 7 may be the answer.

Chapter 13 bankruptcy is a full or partial repayment plan administered by the bankruptcy court. Bankruptcy laws have tightened up considerably in recent years. George W. Bush signed into law the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA). Since then BAPCA has been subject to a number of amendments and exemptions.