Bankruptcy and Your Debts

Wasson and ThornhillBankruptcy Law

Bankruptcy resolves your debts. How it does so depends on whether your debt is secured, priority, or general unsecured.   Your debts are the reason you are reading this. You want to know how bankruptcy would deal with your debts. Will bankruptcy write off all your debts? Can you keep paying some of your debts like a vehicle loan or … Read More

During 2019 You Can Include 2018 Income Tax Debt in Chapter 13

Wasson and ThornhillIncome Taxes

If you owe 2018 income tax you can now include that tax into a new Chapter 13 case and payment plan.     Have you been considering filing bankruptcy and now also expect to owe income taxes for 2018? If so, the start of 2019 gives you more reason to file a Chapter 13 “adjustment of debts” case. Why? Because … Read More

Get Rid of More Income Tax Debts through Chapter 13 in 2019

Wasson and ThornhillIncome Taxes

If you need to file a Chapter 13 case for other reasons, you can discharge more income tax debts in 2019 by timing it right.   Last week we showed how to permanently write off (“discharge”) more of your tax debts through Chapter 7 “straight bankruptcy.” Today we show how to do this with Chapter 13 “adjustment of debts.” Why … Read More

Avoiding the Disadvantages of a 5-Year Chapter 13 Case

Wasson and ThornhillPre-Bankruptcy Planning

There are financial, credit record, risk, and emotional disadvantages to a 5-year Chapter 13 case that you might avoid through smart timing.   Our last two blog posts were about how the last 6 calendar months of income of a person filing a Chapter 13 case can determine whether his or her Chapter 13 payment plan lasts only 3 years … Read More

Paying a Special Debt Before Bankruptcy Could Be a Preference

Wasson and ThornhillPre-Bankruptcy Planning

You may feel like paying a special debt, and during this time of the year you may even get some extra money to do it. Maybe you shouldn’t.   Last week we explained how giving a significant gift before bankruptcy could cause problems during bankruptcy. This also applies to selling something for much less than it is worth. Such a gift or sale might … Read More

Showing How the Means Test Can Work for You

Wasson and ThornhillQualifying for Bankruptcy

Here’s an example showing how the means test can work for you, especially if you file your Chapter 7 case before the end of 2018.   The month of December is the month that people receive more income than any other month of the year. According to the federal Bureau of Economic Analysis (part of the U.S. Department of Commerce), for at … Read More

Unexpected Benefit: Reject a Vehicle Lease in Chapter 13

Wasson and ThornhillVehicles & Bankruptcy

Chapter 7 is the cleanest way to reject a vehicle lease and owe nothing. But if you have other reasons to be in Chapter 13, that works too.   Ending a Vehicle Lease in Chapter 7 Our last blog post was about how a Chapter 7 “straight bankruptcy” can get you out of a vehicle lease. You can “reject” a … Read More

Unexpected Benefit: Better Ways to Save Your Vehicle with Chapter 13

Wasson and ThornhillVehicle Loans

Chapter 7 can’t directly help much your vehicle loan. But Chapter 13 can: it can buy you much more time and likely lower your payments.   Problems to Solve Last week we addressed the kind of help Chapter 7 “straight bankruptcy” provides on your vehicle loan. Mostly it clears the deck of your other debts so that you can afford … Read More

Unexpected Benefit: Write Off a Divorce Debt

Wasson and ThornhillBankruptcy and Divorce

Chapter 7 does not write off any divorce debts. But Chapter 13 can write off a divorce debt if it is not for child or spousal support.   “Discharging” a Debt or Legal Obligation When you successfully complete a consumer bankruptcy, you get a discharge of some or all of your debts. When a debt is discharged the creditor is … Read More

Unexpected Benefit: An Income Tax Lien on a Nondischargeable Tax

Wasson and ThornhillTax Debts

Hit with an income tax lien on a tax that bankruptcy can’t discharge? Bankruptcy is all the more valuable so that you can afford to pay off that tax.   We’ve been talking about the effect of an income tax lien on an income tax that bankruptcy CAN discharge–legally write off. A tax lien can turn that tax from one you don’t … Read More

Unexpected Benefit: Dealing with a Recorded Income Tax Lien with Chapter 13

Wasson and ThornhillIncome Taxes

Chapter 13 is better with a recorded tax lien because it protects you permanently from the IRS/state. And saves you big money on that tax.   Last week’s blog post was about dealing with a recorded tax lien by filing a Chapter 7 “straight bankruptcy” case.  Usually the IRS’ or state’s recording of a tax lien against you effectively requires … Read More