New to this- Considering BK- Looking for advice

[lawrence260]

I will try to keep it short:

3 years ago it starte- 2 foreclosures, 3 CC's now with collections, Car repo(still have 16K) difference after sale. Student loans in default for over 2 years. Just found out have federal tax lien (unpaid taxes).

Long story short my credit is SHOT, changed number and no forward mail. 35 year old single male- How will this effect future wife (bless her )

I am looking to take the steps to rebuild.

How will this effect the federal tax lien?

Would I be best to file 7 or 13?

Also I was just quoted $1800 for a chapter 7

What is a decent price, as I have not the first clue of what is the going rate.

Thanks for your advice

[oregonpilot]

Welcome lawrence. Glad you found us.
There are alot of great peeps on here with tons of great info and insight.
As for the bk cost. I paid 1895.

[disconapper]

Hi Lawrence260,

First welcome to the forum, this is an excellent place for advice and support, I love it.

Let me go over my situation as to why I filed first, maybe that will provide you with some insight since you and I have similar situations.

Three years ago I was making great money and continued to do so until June of last year. I lived a lifestyle beyond my means for the most part, flashy cars, fancy trips etc. However, I managed to pay my bills on time, I even paid off some credit cards.

I had unfiled tax returns for 2004/2005/2006/2007 and hired a tax attorney to handle those issues in late 2009. The IRS sent me a nice tax bill for 25K and my state (Maryland) sent me a nice bill for 7K. I went on a payment plan for both of them.

In June of last year I was laid off, everything went downhill very fast. In September, I was hired back by my company at a much lower wage (40K paycut). Maryland had already filed a garnishment order against me, I was clueless of this fact until I saw my first paycheck minus the 25% post tax deduction. Being that my check was much lower than I needed, the garnishment hurt, bad. I got a part time job, then my hours at my full time job started to constantly change (I work in the power industry), so I had to quit. The 100/200 dollars extra a week wasn't making that much of a difference but it helped.

I stopped by all bills except the necessities in June of last year. So no credit card payments or anything else. Only the car, car insurance, phone, rent, food, gas etc. I still did not have enough money to make those ends meet. My installments for my back taxes were not paid, well Maryland was through the garnishment, but not the IRS.

I had a free consultation with an attorney in December and discussed possibly filing bankruptcy. I did not proceed with the filing or with that attorney.

I consulted another attorney in January.

I filed a Form911 with the IRS in March, they were getting ready to issue a wage garnishment. My case was assigned to a Taxpayer Advocate and due to my income or lack thereof, all collections were stopped. Mind you, they are still charging interest on my tax debt.

I received my first lawsuit in at the end of March/early April. That following Monday I put an attorney on retainer, and began the process for filing a Chapter 7. My chapter 7 was officially filed on 04/21/2011.

I'm just 13 days shy of 34 years old and like you (with one exception) wonder what my future husband will think. (And bless him, haha)

Here's my take on the future spouse issue: my young age (and your young age) is an advantage, there is ample time to rebuild credit, live smart financially and make sound judgments for my future. I would rather my spouse know of a bankruptcy and have comfort that the debts are gone via such bankruptcy, rather than have to disclose to him that I have lots of unresolved debt issues. I think the latter is much more of a burden and is one of the reasons why I have remained relatively single, it's like a dirty little secret.

Your tax liens will not go away unless the debt is over 3 years old and the returns were filed on time. My tax debt will be my ONLY debt after bankruptcy and I can handle that, most certainly. Your student loan debt will not go away either.

Whether you file a Chapter 7 or 13 is best advised by an attorney. I filed a 7 due to my income and lack of assets. I don't have a house and I pass the means test based on income alone for Maryland, that's without even performing the actual test itself. A 7 stays on your credit much longer but there is no payback of debt. The 13 will put you on a payback plan, paying off your debt via a US Trustee over an extended period of time. You should consult with an attorney to explore your options on whether a 7 or 13 is best for you.

I paid $1095 for my bankruptcy, that includes the $299 filing fee. The cost varies by state and attorney, I have heard higher and I have heard lower than what I paid.

My credit is shot as well, but my age (like you) and the bankruptcy itself will allow me to rebuild.

I think what threw me off the cliff in the direction of filing was the lawsuit and being sick and tired of worrying, not sleeping, not being able to do anything, just working to put gas in the car and a little food in the fridge.

The bankruptcy system itself was developed for people that have fallen on hard times and can't make it work. It's not an easy process, it's certainly intimidating but I know, without exception it was the right choice for me.

If you are drowning in debt and not surviving, then I would consider it, at least meet with someone. I pulled my credit report today and saw that a lot of my accounts were charged off and sold to collections, which meant more lawsuits were coming, it was just a matter of time.

I'm glad I decided to file, and hopefully by August sometime, I will be discharged and start to rebuild my credit and life.

I hope this helps and I hope I didn't ramble to much.

[holycowe]

-Chapter 7 cost between $999 up to >2k depends on how easy, complicated.
-you need to provide your incomes, assets...for the experts here (am newbie) let you know you will qualify for ch7 or not. Even if you qualified for ch7, you'll have to pay your student loans, fed. tax sooner or later.
-Try to take care of the mess with bk before marry your beautiful lady. This is a MUST

[lawrence260]

I guess my next question is whats first?

Trying to resolve the tax debt/filing my previous 6 missed years(oops) and working a settlement, or filing BK?

Taxmasters tells me to file the taxes, because they will be more agressive if I have a discharged BK(he was a salesman so I didnt know what to believe)

A attorney says to file the BK, and didnt know about the tax lien situation.

[disconapper]

I would advice that those past taxes are filed. You could file the returns on your own then file the bankruptcy shortly thereafter.

I believe the IRS is aggressive regardless, however they have been very easy for me to deal with, that's out of all my creditors.

I used a firm similar to TaxMasters to file my past due returns, turns out it was something I could have easily done on my own, but I was just scared.

I would find it hard to believe that the attorney would advice you to file the BK first had he/she known about the tax lien. I'm no expert in this process but unfiled returns could mean refunds due you and during your bankruptcy process that money could be obligated to the estate.

I had to provide two years back tax returns to my bankruptcy attorney.

I would fully disclose the tax situation to the bankruptcy attorney and go from there.

[lawrence260]

oh I assure you that I am not due a refund.....regardless I am on hold with the IRS now ordering full transcripts for the past 7 years.

We are talking about a $200k lien from the IRS. For a guy that now makes $14hr this is going to be a long fight.

I would advice that those past taxes are filed. You could file the returns on your own then file the bankruptcy shortly thereafter.

I believe the IRS is aggressive regardless, however they have been very easy for me to deal with, that's out of all my creditors.

I used a firm similar to TaxMasters to file my past due returns, turns out it was something I could have easily done on my own, but I was just scared.

I would find it hard to believe that the attorney would advice you to file the BK first had he/she known about the tax lien. I'm no expert in this process but unfiled returns could mean refunds due you and during your bankruptcy process that money could be obligated to the estate.

I had to provide two years back tax returns to my bankruptcy attorney.

I would fully disclose the tax situation to the bankruptcy attorney and go from there.

[disconapper]

Ouch. Yes, that's going to be a long fight, better to start fighting now though. The IRS has a taxpayer advocacy division for individuals with lower incomes. Your account can be deemed "uncollectable" if you meet their standards.

[lawrence260]

I was just told that I owe 124K just for 04/05. That doesnt include 06-10. heck I didnt make have that for those 2 years.

Ouch. Yes, that's going to be a long fight, better to start fighting now though. The IRS has a taxpayer advocacy division for individuals with lower incomes. Your account can be deemed "uncollectable" if you meet their standards.

[disconapper]

Did you not pay any taxes at all? Something is triggering that very large amount. Self Employed?

[lawrence260]

I did daytrade those years. I bought and sold alot, and probably broke even. All the sells are showing as income. wow.....

Still dont know if this is the lien.

Did you not pay any taxes at all? Something is triggering that very large amount. Self Employed?

[disconapper]

Yikes. Wouldn't there be a loss associated with trading as well? I'm naive on the subject though.

You should have received an official "Notice of Intent to Lien" and then the subsequent copy of the lien itself, it will also appear on your credit report. Or you can call the IRS and ask....

[daylate]

Talk to a couple of CPA's or Enrolled Agents about your tax situation. Something sounds a bit off to me. Your taxes shouldn't be more than you made. Now if you didn't file there are going to be penalties and interest. All in all, I'd talk to a good CPA or enrolled agent. I'd advise against using a firm that advertises a lot about how they saved people thousands of dollars unless you thoroughly research them. Many of them overcharge and under deliver. Good luck.

[disconapper]

Talk to a couple of CPA's or Enrolled Agents about your tax situation. Something sounds a bit off to me. Your taxes shouldn't be more than you made. Now if you didn't file there are going to be penalties and interest. All in all, I'd talk to a good CPA or enrolled agent. I'd advise against using a firm that advertises a lot about how they saved people thousands of dollars unless you thoroughly research them. Many of them overcharge and under deliver. Good luck.

Totally agree here, those firms are essentially a scam, they are doing nothing that you can't do for yourself, basically data entry. The questions they answer for you can easily be answered with a little research or calling the IRS yourself. In this particular situation, I would certainly retain a CPA or Tax Attorney. The amount you owe does not seem correct at all, something is not right.

[Ifonly]

It sounds like your tax obligation is being calculated on the sale price as 100% profit (no cost basis). You're going to need a CPA to calculate your Schedule D's and identify the cost basis and identify and "wash" sales you may have had. However, you're going to have to to provide them with the sale information (usually on the 1099 that the brokerage house provides to you for that year). Expect the CPA to charge a pretty decent amount as this type of work represents a lot of key strokes and man hours for tax preparation. I would advise against a store front franchise preparer and steer clear of those TaxMasters type people. They are NOT accountants, etc. as their commercials claim. In fact, they've recently been accused of tax fraud in several states. A good local CPA should be able to help you out.