Consumer Bankruptcy, Tax Debt

Best Types of Bankruptcy for Tax Debt

Tax debt is one of the few forms of debt that is not always easily erased in a consumer bankruptcy case. While it is true that discharging tax debt can be difficult in a bankruptcy case, it is not impossible. Ultimately, it depends on the type of bankruptcy being pursued and the type of debt involved as to how it is handled.

While a bankruptcy filing normally puts an immediate halt to all collection actions on debt through the automatic stay, tax debt is treated differently.

Bankruptcy Law, Consumer Bankruptcy

What Documents do you need to File Bankruptcy in Florida?

At the start of a bankruptcy case, the filer is asked to fill out certain documents, including disclosures regarding the person’s financial affairs. This disclosure includes the person’s income, expenses, assets, debts, and any property transfers.

The filer will also need to provide supporting documentation, and the documents required are essentially the same for both Chapter 7 and Chapter 13 cases, with slightly different variations. It is often helpful to check with the bankruptcy trustee to ensure that all required documentation is submitted. Some trustees require more proof than others, and many times, this evidence will also be determined by the facts of the individual’s case.

Consumer Bankruptcy

What to Expect Before, During and After Filing for Bankruptcy

The process of filing for bankruptcy can seem daunting and unclear for many filers. The uncertainty behind the process often drives the fear of the unknown, which keeps many people from pursuing a bankruptcy case. Pulling back the curtain and knowing what to expect when filing for bankruptcy can help clear up any myths or misconceptions surrounding bankruptcy.

Making the decision to pursue a bankruptcy case is often the thing that holds people back the most. It can be difficult for someone to admit that they need financial help offered through a bankruptcy case. Many see it as admitting failure, which could not be any further from the truth.

Consumer Bankruptcy, Tax Debt

Does Bankruptcy Eliminate Tax Debt?

By the time an individual reaches the point of filing for bankruptcy, he or she is likely inundated with all types of consumer debt, ranging from medical debt to credit card debt and possibly, tax debt. While a consumer bankruptcy case will eliminate a large portion of this debt, tax debt is not normally included in this list.

Taxes fall into the category of “non-dischargeable priority debt,” which means that the bankruptcy case will not eliminate them. Additionally, repayment of these claims is given priority over other creditors’ claims. However, circumstances do exist where tax debt can be discharged with a bankruptcy filing, but certain requirements must exist before that can happen.

Consumer Bankruptcy, Consumer News

DeSantis Vetoes Florida Bankruptcy Relief Bill

Gov. Ron DeSantis vetoed a measure last week that would have provided some much-needed relief for those struggling financially in Florida.  The specific measure, HB 265, was passed unanimously by both the state senate and legislature during the most recent legislative session, where it was quickly vetoed by DeSantis. This bill represents the third bill vetoed by the governor.

This bill would have given Floridians facing bankruptcy relief by providing them credit for any equity they may have had in their vehicle. The law would increase the bankruptcy exemption provided to debtors in their cars from $1,000 to $5,000.

Bankruptcy Law

What Debts Are Not Erased in Bankruptcy?

Not all debts can be discharged in a consumer bankruptcy case under the U.S. Bankruptcy Code. These debts will remain with the consumer even at the successful close of the Chapter 7 bankruptcy case.  While these debts may remain with the consumer, many of his or her other consumer debts will not. The goal is that with the discharge of other debts, the consumer will have extra money to be able to pay down these non-dischargeable debts.

For the most part, the consumer debts that are discharged include credit card debt, medical bills, past utility bills, personal loans and in some cases student loan debt. Many of these non-dischargeable debts cannot be eliminated due to public policy interests, such as child support.

COVID-19, Credit Card Debt

Seventy-Five Percent of Americans Have Missed Credit Card Payments Due to COVID-19 Pandemic

The COVID-19 pandemic has pushed many Americans into financial struggles. The disruption to employment, childcare, and school routines crippled the economy and forced millions of women and families to the financial brink. While many have bounced back, others continue to struggle.

According to a new survey from Forbes Advisor, 75 percent of American consumers have reported missing payments or making a late payment at least once on their credit cards due to the COVID-19 pandemic.