Won't Bankruptcy Destroy My Credit?
Actually, no — it won't, at least not in as harmful a way as you might think. The truth is that if you're like most people who file bankruptcy, you've been doing damage to your credit rating for quite some time.
Each time you miss a payment, are late or can't make your monthly minimum — your credit rating gets a little bit worse.
When you file a Chapter 7 or Chapter 13 bankruptcy petition, what you are really doing to your credit rating is putting an end to the vicious cycle of always trying to play catch-up and always falling further behind. You set the ground floor and you begin to actually repair the damage that's been done.
Our attorney can help you take the first steps towards a fresh start.
Are There Any Tax Issues or Consequences?
Yes, there are both tax issues and tax consequences associated with filing for bankruptcy. For instance, many people don't realize that some IRS tax debts can be wiped out through the bankruptcy process and make the mistake of borrowing money to pay off those debts because the IRS is threatening them. Later, when they file for bankruptcy anyway, they can be stuck with a debt they can't get rid of.
On the consequence side, suppose you renegotiate the amount of money you owe on a personal loan or credit card from $20,000 dollars down to $8,000 dollars. For tax purposes, the IRS will treat this as actual income — meaning that when next year's taxes come due, you will have $12,000 dollars of untaxed income to account for.
Will I Have to Give Up Everything I Own?
This is one of the biggest fears people experience when considering bankruptcy and fortunately, it is also one of their biggest misconceptions.
The truth is that while your property and possessions have tremendous value to you as an individual — most will not have the kind of value that your creditors or the bankruptcy trustee would be interested in. In fact, you will probably be able to keep most, if not all of your personal property by using the standard exemptions. If that isn't the case, we may still be able to help you keep non-exempt possessions through other means.
Local: (619) 573-4192 / Toll Free: (866) 603-4856
Learn more about bankruptcy's tax issues, repairing your credit rating and asset protection strategies that work by calling the Law Offices of Mark Ankcorn in San Diego, California. Just send us a brief e-mail message or use either of the two phone numbers listed above to make arrangements for a free initial consultation with our lawyer.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.
Serving Chula Vista, Escondido, and
Other San Diego Area Communities
