Reducing Tax Debt through Bankruptcy
Dealing with high interest credit cards, medical bills or late car payments may be stressful enough, but dealing with the IRS can create a new level of financial turmoil. The law allows the IRS to place levies on personal property in order to collect taxes. This allows it to seize real property and vehicles, and even take money out of your bank account. Fortunately, a bankruptcy can help you avoid the loss of your property and money. Just as it allows the discharge of unsecured debt, bankruptcy can be used to discharge federal tax debt as well.
Federal income taxes may be discharged in a Chapter 7 bankruptcy if the debtor meets all of the following conditions:
• Income taxes are sought to be discharged: Only personal income taxes may be discharged through bankruptcy. Business payroll taxes and penalties for tax fraud may not be discharged.
• The debtor did not commit willful tax evasion or tax fraud: If a debtor was penalized for repeatedly failing to pay taxes, hiding money or taxable assets from the IRS, or filing a blank or incomplete tax return; these charges may not be eliminated through bankruptcy. The same applies to charges levied due to tax fraud.
• The 240-day rule applies: The tax debt must have been assessed at least 240 days before the bankruptcy petition is filed.
• The taxes stem from a legitimate tax return: The debtor filed a tax return for the relevant tax years at least two years before filing for bankruptcy.
• The past tax debt is at least three years old: The tax debt was originally due at least three years before filing for bankruptcy.
In a Chapter 13 bankruptcy, a debtor will make payments on tax debt through a repayment plan. Such plans last between 36 and 60 months, and the payments are based on the debtor’s disposable income. After the plan is completed, the remaining debts are discharged.
The same dischargeability requirements apply for Chapter 13 plans. Only income taxes from legitimate returns that have been assessed at least 240 days before the petition was filed may be discharged. However, Chapter 13 can be used to pay non-dischargeable tax debts (i.e. unpaid payroll taxes, tax penalties) over time.
The preceding is not intended to be legal advice. If you have questions regarding discharging tax debt, an experienced bankruptcy attorney or tax attorney can advise you on the options available.
If you are in a financial crisis and are considering filing bankruptcy, contact an experienced attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia, P.A. at www.miamibankruptcy.com.
Foreclosures
Mortgage Balance, Default and Foreclosure
Statistics show that the wealthy may be able to stay in their homes longer after default than the average homeowner. The length of time that a homeowner may be in default before the bank takes action may depend in part on the value of the property. A new report suggests that banks may be more lenient with homeowners who live in million-dollar homes than the average homeowner with a mortgage of $250,000 or less. These homeowners have been able to stay in their homes an average of 792 days without making a payment, while a homeowner with a $250,000 mortgage will likely be required to vacate their home up to six months sooner.
The exact reason for the difference is unclear. Some speculate that several factors weigh into the bank’s decision to initiate foreclosure proceedings, including:
• The expense in maintaining these types of homes during the foreclosure process
• The greater likelihood that the wealthy individual will regain the ability to repay the mortgage in the near future
• The fact that a lot of banks do not package and sell larger mortgage loans, loans which may be made to individuals who banks feel are important citizens in the community or with whom they have a long-standing relationship.
All of these factors may play a role in the bank’s decision to initiate foreclosure proceedings.
Bank foreclosures are happening everywhere in this country. Many homeowners are faced with the reality of losing their homes. But homeowners may have options that will stop or delay the process. One of these options is filing for bankruptcy.
Bankruptcy allows debtors to get a fresh start. Essentially wiping the slate clean, individuals can start over and begin the road to recovering financial stability. Once an individual files for bankruptcy, the court implements an automatic stay. This “automatic stay” requires creditors to hold off on their collection actions while the bankruptcy is pending. Whether individuals are able to keep their homes following the bankruptcy may depend on what type of bankruptcy was filed. But often debtors are able to keep their home and vehicle so they have a place to live while rebuilding credit.
Choosing the right attorney can make the difference between whether or not you can keep your home. A well-qualified attorney will not only help you keep your home, but they will be able to negotiate a loan that has payments you can afford. Foreclosure defense attorney, Timothy Kingcade has helped many facing foreclosure alleviate their stress by letting them stay in their homes for at least another year, allowing them to re-organize their lives. If you have any questions on the topic of foreclosure please feel free to contact me at (305) 285-9100. You can also find useful consumer information on the Kingcade & Garcia, P.A. website at www.miamibankruptcy.com.
National Decrease in Foreclosure Sales Throughout 2011
During the second quarter of 2011 there was an eight percent decrease in foreclosed home sales compared to the second quarter of 2010, according to RealtyTrac. The third quarter of 2011 experienced another slight decrease of two percent, which put the average home sales of foreclosed homes at 20 percent nationwide, and 19 percent in Florida. This percentage is still extremely high in comparison to the less than five percent before the recession. The decreased number of sales can be attributed to the unraveling of the robo-signing scandal, which first surfaced in early 2010.
Surprisingly, Florida ranked seventh in the third quarter of 2011 with 19.2 percent of foreclosure home sales. Nevada ranked number one, with an average of 75 percent of home sales being foreclosed homes. The second and third ranked states, California and Arizona, averaged just over 40 percent. Many believe that Florida’s lower percentage is due to the fact lenders are often choosing to conduct pre-foreclosure sales (short sales) to avoid dealing with maintenance of properties throughout the foreclosure process.
To read more on this story visit: http://therealdeal.com/miami/blog/2011/08/24/florida-foreclosure-sales-down-22-percent-according-to-realtytrac/
Or visit: http://therealdeal.com/miami/blog/2012/01/26/foreclosed-properties-comprise-20-percent-of-all-u-s-home-sales-19-percent-in-florida/
Choosing the right attorney can make the difference between whether or not you can keep your home. A well-qualified attorney will not only help you keep your home, but they will be able to negotiate a loan that has payments you can afford. Foreclosure defense attorney, Timothy Kingcade has helped many facing foreclosure alleviate their stress by letting them stay in their homes for at least another year, allowing them to re-organize their lives. If you have any questions on the topic of foreclosure please feel free to contact me at (305) 285-9100. You can also find useful consumer information on the Kingcade & Garcia, P.A. website at www.miamibankruptcy.com.
Palm Beach County Courts Hold approximately 7,000 Zombie Foreclosure Cases
In Palm Beach County, 17 percent of the foreclosure cases are currently lying dormant in Palm Beach County courts. A large portion of the 6,927 ‘zombie cases’ have stalled for more than a year, some dating as far back as 1997. This growing number of vacant and deteriorating homes is creating a widespread problem and affecting the value of other homes on the market. While some of the dormant cases are mistakes due to one party forgetting to request a dismissal, much of the inaction is a result of homeowners filing for bankruptcy, lenders inability to prove ownership, and loan modification negotiations. Whatever the reason, many homeowners are clueless about the status of their cases and have not been making payments for years.
If a case has been dormant for 10 months, the homeowner can legally file for a dismissal of the case. The lender then has 60 days to act. If no action occurs, then the case is thrown out. Peter Blanc, Palm Beach County Chief Judge, thinks Palm Beach County will see a rise in dismissals due to the recent state funding received to hire extra help for foreclosure cases. Another frustrated Palm Beach County Judge, John Hoy’s advice to banks is, “If you can’t take care of old cases, don’t file new ones.” Both judges were in agreement that the problems with zombie cases now, stem from malpractices by banks in earlier years.
To read more on this story visit: http://www.palmbeachpost.com/money/foreclosures/the-zombie-files-nearly-7-000the-zombie-files-nearly-7-000-stagnating-foreclosure-2305388.html?viewAsSinglePage=true
Choosing the right attorney can make the difference between whether or not you can keep your home. A well-qualified attorney will not only help you keep your home, but they will be able to negotiate a loan that has payments you can afford. Foreclosure defense attorney, Timothy Kingcade has helped many facing foreclosure alleviate their stress by letting them stay in their homes for at least another year, allowing them to re-organize their lives. If you have any questions on the topic of foreclosure please feel free to contact me at (305) 285-9100. You can also find useful consumer information on the Kingcade & Garcia, P.A. website at www.miamibankruptcy.com.
New York Attorney Agrees to Pay $4 Million for Foreclosure Malpractice
New York foreclosure attorney, Steven Baum has agreed to a $4 million settlement with the New York State Attorney General, Eric Schneiderman, in a suit alleging that his firm and staff mishandled numerous foreclosure cases. Baum’s firm generated the largest number of foreclosure filings in New York from 2007 to 2010. In this three-year span, the firm filed around 100,000 foreclosure proceedings. Schneiderman intends for this case to set the precedent that attorneys and lenders will be held accountable in his district for wrongful mortgage and foreclosure practices.
Some of the malpractices by the Baum Firm included:
• The firm repeatedly claiming the plaintiff to be the holder of the note, when there was no documentation to prove this statement;
• In many cases the firm used a separate company for much of the processing. By use of the separate company, the firm intended to speed up the documentation process in order to file more foreclosures and increase their own profit;
• Employees from the firm often times were not authorized, trained, or certified to sign off on or handle documents they were signing;
• Many times documents were “pre-signed” without ever being read by an attorney.
Even after the settlement Baum still claims no wrong-doing by him or his firm, saying the Attorney General never disclosed a specific case where his firm preceded with foreclosure on a person whose loan was not in default.
To read more on this story visit: http://www.bizjournals.com/buffalo/news/2012/03/22/baum-settles-with-ag-will-pay-4m.html?page=all
Choosing the right attorney can make the difference between whether or not you can keep your home. A well-qualified attorney will not only help you keep your home, but they will be able to negotiate a loan that has payments you can afford. Foreclosure defense attorney, Timothy Kingcade has helped many facing foreclosure alleviate their stress by letting them stay in their homes for at least another year, allowing them to re-organize their lives. If you have any questions on the topic of foreclosure please feel free to contact me at (305) 285-9100. You can also find useful consumer information on the Kingcade & Garcia, P.A. website at www.miamibankruptcy.com.
Artist Kathryn Clark Creates Quilts to portray our Nation’s Foreclosure Crisis
San Francisco artist, Kathryn Clark has been depicting the effects of the foreclosure crisis by creating her own line of quilts. She has created nine quilts that display neighborhoods from across the country that have been hit the hardest by the housing market crash. An artist at heart, Clark spent more than five years as an urban planner. She began to notice the stories in the news about the foreclosure crisis and began noticing signs in her own neighborhood, which inspired her to depict the economic problems through her work. She chose to express the crisis through quilts because she was able to use older fabrics that were worn and provided a good representation of the distressed neighborhoods.
Clark has created quilts for areas across the country hit hardest by the crash, including: Riverside, CA, Cape Coral, FL., Las Vegas, Modesto, CA., Cleveland, Albuquerque, Atlanta, Detroit, and Phoenix.
To read more on this story and view pictures of some of Kathryn Clark’s work visit: http://www.theatlanticcities.com/arts-and-lifestyle/2012/03/crafting-foreclosure-crisis/1622/
Choosing the right attorney can make the difference between whether or not you can keep your home. A well qualified attorney will not only help you keep your home, but they will be able to negotiate a loan that has payments you can afford. Foreclosure defense attorney, Timothy Kingcade has helped many facing foreclosure alleviate their stress by letting them stay in their homes for at least another year, allowing them to re-organize their lives. If you have any questions on the topic of foreclosure please feel free to contact me at (305) 285-9100. You can also find useful consumer information on the Kingcade & Garcia, P.A. website at www.miamibankruptcy.com.
Huge WIN for Victims of the Housing Market Crash and Foreclosures
On March 9th 2012, the Florida State Legislative came to the decision to not pass the foreclosure bills that would ultimately speed up the foreclosure process. The Florida attorneys fighting for the cause worked along side consumer groups and activists for the third year in a row to ensure the Senate did not pass the bills. A few of the groups that worked relentlessly for this cause was PICO Florida, FOCUS, The Florida Consumer Action Network, Sarasota’s Mortgage Justice Group, and some members from Florida’s Tea Party.
To read more on this story visit: http://mattweidnerlaw.com/blog/2012/03/we-fought-the-law-and-we-won-foreclosure-bills-dead-for-now/
Choosing the right attorney can make the difference between whether or not you can keep your home. A well qualified attorney will not only help you keep your home, but they will be able to negotiate a loan that has payments you can afford. Foreclosure defense attorney, Timothy Kingcade has helped many facing foreclosure alleviate their stress by letting them stay in their homes for at least another year, allowing them to re-organize their lives. If you have any questions on the topic of foreclosure please feel free to contact me at (305) 285-9100. You can also find useful consumer information on the Kingcade & Garcia, P.A. website at www.miamibankruptcy.com.
Florida Awarded $8 Billion in Foreclosure Settlement
State and Federal authorities recently finalized the $25 billion settlement with banks, and awarded the State of Florida $8 billion in payments and credits from the settlement.
Florida has a guarantee from Wells Fargo, JPMorgan Chase and Bank of America for at least $4 billion in relief from the settlement first unveiled February 9. The guarantee for Florida includes a minimum $3.1 billion to cut principal and modify loans for financially troubled consumers. And it involves at least $309 million in refinancing for borrowers who are current on mortgage payments but stuck in higher-interest loans that exceed home values.
Critics of the proposed settlement say the relief allotted to Florida is disappointing: up to $2,000 for borrowers who lost their homes in foreclosure abuses and an average $20,000 cut in principal on mishandled loans worth more than the value of the homes.
The settlement with the nation’s five largest lenders: Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial require at least $20 billion in help to borrowers by trimming principal and other means.
To read more on this story visit: http://www.orlandosentinel.com/business/fl-foreclosure-settlement-finalized-20120312,0,6790648.story
Choosing the right attorney can make the difference between whether or not you can keep your home. A well qualified attorney will not only help you keep your home, but they will be able to negotiate a loan that has payments you can afford. Foreclosure defense attorney, Timothy Kingcade has helped many facing foreclosure alleviate their stress by letting them stay in their homes for at least another year, allowing them to re-organize their lives. If you have any questions on the topic of foreclosure please feel free to contact me at (305) 285-9100. You can also find useful consumer information on the Kingcade & Garcia, P.A. website at www.miamibankruptcy.com.
Florida Bill to Speed up Foreclosure Process
A bill to speed up the foreclosure process is on the fast track to becoming a law in the State of Florida. So far, the majority seem to be in support of the bill. However, many Florida attorneys and government officials see several problems if the bill becomes a law. The bill is intended to speed up the foreclosure process for homes that have been abandoned or in cases which the defendant is unable to prove a legitimate reason they should not lose their home in a “show cause” hearing. If the individual is unable to prove his or her case, the bill will allow the lienholder to immediately file a judgment of foreclosure on the home.
Another way the bill would change the foreclosure process is that banks will no longer be able to file a deficiency judgment for more than one year. A deficiency judgment is how much debt is still left after the property is resold. Currently, banks may file a deficiency judgment for up to five years.
Critics of the bill see a problem due to the fact that Florida courts have always ruled that when homeowners are absent from their homes, the homes are not considered “abandoned.” Another criticism with the bill is that homeowners who lost their homes due to fraudulent foreclosure practices are only able to receive monetary compensation and have no chance of repossessing their homes. However, the most substantial problem with the bill, deals with the “show cause” hearing. Attorneys say that it is difficult to prove a defendant’s case because there is typically very little time and that most initial court documents filed are false, but it is impossible to tell they are false.
If the bill is passed, it will go into effect July 1, 2012. The law will apply to any future and current foreclosures that are making their way through the system.
To read more on this story visit: http://www.palmbeachpost.com/money/foreclosures/bill-to-streamline-foreclosures-moves-one-step-closer-2203415.html
Choosing the right attorney can make the difference between whether or not you can keep your home. A well qualified attorney will not only help you keep your home, but they will be able to negotiate a loan that has payments you can afford. Foreclosure defense attorney, Timothy Kingcade has helped many facing foreclosure alleviate their stress by letting them stay in their homes for at least another year, allowing them to re-organize their lives. If you have any questions on the topic of foreclosure please feel free to contact me at (305) 285-9100. You can also find useful consumer information on the Kingcade & Garcia, P.A. website at www.miamibankruptcy.com.
Congress not likely to Renew Mortgage Forgiveness Debt Relief Act- Underwater Homeowners need to Act Fast
In October of 2007, Congress passed the Mortgage Forgiveness Debt Relief Act to help underwater homeowners who were struggling to pay their mortgages. In most cases, any debt you have been relieved of by your creditors should be listed on your taxes as income, which means the taxpayer would owe on this amount. Due to the housing bubble burst and the resulting real estate crisis, this Act was passed to allow taxpayers to be forgiven of this amount.
This tax relief applies to debt forgiven in calendar years 2007 through 2012. The debt must have been used to buy, build or substantially improve the homeowner’s principal residence and must have been secured by that residence. Debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, may also qualify for the relief.
It is important that underwater homeowners act fast to take advantage of this important tax break, as foreclosure and short sale proceedings can take up to a year to process.
Due to the $2.7 billion this has cost the government in only two years, many believe it is unlikely that this Act will be renewed at the end of its term in December of 2012.
To read more on this story visit: http://www.allgov.com/Top_Stories/ViewNews/Congress_May_End_Program_Allowing_Tax_Relief_for_Mortgage_Modifiers_120225
Choosing the right attorney can make the difference between whether or not you can keep your home. A well qualified attorney will not only help you keep your home, but they will be able to negotiate a loan that has payments you can afford. Foreclosure defense attorney, Timothy Kingcade has helped many facing foreclosure alleviate their stress by letting them stay in their homes for at least another year, allowing them to re-organize their lives. If you have any questions on the topic of foreclosure please feel free to contact me at (305) 285-9100. You can also find useful consumer information on the Kingcade & Garcia, P.A. website at www.miamibankruptcy.com.