If You Have Unfiled Tax Returns

Wasson and ThornhillIncome Taxes

tax return

You’re considering bankruptcy, and you have some unfiled tax returns for the IRS and/or your state. Should you prepare and file them, and when? Our last two blog posts have been about what you should and should not do before filing bankruptcy. These are important to consider even if you hope to avoid bankruptcy but are sensibly admitting it’s possible. … Read More

Considering Bankruptcy? Do this.

Wasson and ThornhillBankruptcy Advice

selling possessions

Photo by Clem Onojeghuo on Unsplash If you’re even considering bankruptcy, consider taking some actions which seem to go against common sense, including about your possessions. Last week we made the point that if bankruptcy is even a possibility for you, please quickly get legal advice. We said when considering bankruptcy you should get legal advice to find out: if … Read More

Ways to Pay Mortgage Forbearance Payments

Wasson and ThornhillHome Mortgages

home

Photo by Phil Hearing on Unsplash The CARES Act allows up to 12 months of forbearance on federal backed mortgage payments. When and how must you pay those missed payments?   Last week we presented the new law allowing forbearance—skipping payments—on federally backed mortgages during the pandemic. Basically, if the pandemic has hurt you financially you can request and receive … Read More

Bankruptcy Filings Poised to Increase

Wasson and ThornhillFinancial Crisis

bankruptcy petition

Photo by Melinda Gimpel on Unsplash Consumer bankruptcy filings edged up in 2019, increased more this March, sharply declined in April, but are very likely to shoot up now. In the last two weeks three major retailers filed Chapter 11 business bankruptcy: J. Crew, Neiman Marcus, and J.C. Penny. Total business Chapter 11 reorganizations were up 26% in April 2020 … Read More

Protect Your $1,200 from Creditor Collection

Wasson and ThornhillCreditor Lawsuits, Financial Crisis

Your $1,200 pandemic relief payment from the IRS is subject to creditor collection, if you have a garnishment order on your bank account. Our blog post four weeks ago was about the $1,200 pandemic relief payments going out to most U.S. adults. The CARES Act explicitly protected these payments from seizure for certain governmental debts. Generally, the payments can’t be … Read More

Coronavirus Law Changes to Consumer Bankruptcy

Wasson and ThornhillChanges in Bankruptcy Law

New $2.2 trillion coronavirus relief law makes modest but potentially important temporary changes to both Chapter 7 and Chapter 13 law.   If you’re thinking about filing a Chapter 7 “straight bankruptcy” case, the new CARES law may help, at least slightly. If instead you’re thinking about a Chapter 13 “adjustment of debts” case, the new law helps in more … Read More

U.S. Treasury Sending $1,200 Relief Payments

Wasson and ThornhillFinancial Crisis

The U.S. Treasury is sending money to most adults “as rapidly as possible,” $1,200 if you make less than $75,000, plus $500 per dependent.   On Friday (March 27) Congress passed and the President signed into law the Coronavirus Aid, Relief, and Economic Security Act. It’s also called the CARES Act, better known as the massive $2.2 trillion pandemic relief … Read More

Driving While Intoxicated Personal Injury

Wasson and ThornhillBankruptcy Law

If you owe someone for injuring them by unlawfully driving while intoxicated, that debt would be a priority debt in bankruptcy. So what?   Priority Debts For many weeks our blog posts have been considering how bankruptcy deals with “priority” debts. Examples of these special debts that we’ve covered include child/spousal support, income taxes, and wages owed employees. Sections 507(a)(1),(4), … Read More

Pay Your Debt to an Employee

Wasson and ThornhillBusiness Bankruptcy

If you operate or used to operate a business and are considering filing bankruptcy and would like to pay an employee, the law can help you.   Our last two blog posts were about debts owed to your employees or independent contractors. Specifically we discussed the conditions in which past wages, commissions, or benefits qualify as “priority” debt. Two weeks … Read More

Debts for Employee Wages

Wasson and ThornhillBusiness Bankruptcy

Debts for wages, commissions, and employee benefits may be priority debts, more likely paid. It depends on the timing and amount of the debt.     Our last dozen blog posts have been about “priority” debts. These are special unsecured debts that bankruptcy law treats better than the rest, called “general unsecured” debts. (Secured debts are a third main category … Read More

Chapter 13 and Unpaid Child or Spousal Support

Wasson and ThornhillChild & Spousal Support

If you are behind on child or spousal support, Chapter 13 is better because it stops collection of this unpaid support. Chapter 7 doesn’t.   Last week we discussed situations in which Chapter 7 would help if you’re behind on child or spousal support payments. We made clear that Chapter 7 “straight bankruptcy” provides only limited help. Mostly it gives you relief … Read More

An Income Tax Chapter 13 Plan

Wasson and ThornhillIncome Taxes

An income tax chapter 13 plan lets you to pay the IRS whatever you can afford, avoid some or all penalties, and stop interest from accruing.   Today we put the facts of last week’s blog post into a Chapter 13 plan, showing how it actually works. You’ll see how Chapter 13 saves you money and avoids stress as you … Read More

Pay Income Tax Debts through Chapter 13

Wasson and ThornhillIncome Taxes

One of the smartest ways to pay your priority income tax debts—ones that can’t be discharged, written off—is through Chapter 13.   Last week we discussed the advantages of paying priority debts through a Chapter 13 “adjustment of debts” case. We referred to recent income taxes as one of the most important kinds of priority debt. Today we show how … Read More

Priority Debts in a No-Asset Case

Wasson and ThornhillEffects of Bankruptcy

In a Chapter 7 no-asset bankruptcy case, the trustee collects nothing from you and pays nothing on your debts, including your priority ones.   Most Chapter 7 Cases Are No-Asset Cases Chapter 7—“straight bankruptcy”—is the most common type of consumer bankruptcy case. They are generally the most straightforward, lasting about 4 months start to finish. Usually everything you own is … Read More

Priority Debts in Bankruptcy

Wasson and ThornhillBankruptcy Law

In bankruptcy some debts are treated much, much better than others. Priority debts are treated much better in various important ways.   Debts Are Different So the Law Recognizes Some Differences The law does not treat all debts the same. That’s because you have different kinds of creditors that you owe for very different reasons. The law tries to be … Read More