The North Carolina Bankruptcy Information Blog

As we’re all aware, this decade’s Great Recession has dealt, and continues to deal, a significant blow to the budgets of many American families, leaving millions in debt, underwater in their mortgages, and in some cases falling behind on their tax bills, adding to their economic unrest.

So, even though tax day 2012 is weeks away, and the holidays may already have your full attention, it’s worth noting that there are some timely tips you can take between now and Dec. 31 that will make a real difference when it comes time to deal with the IRS next spring. In part one of its two-part report, according to AOL’s DailyFinance, there are four moves that could benefit your bottom line, and keep the tax man at bay, on April 15.…

As we’re all aware, this decade’s Great Recession has dealt, and continues to deal, a significant blow to the budgets of many American families, leaving millions in debt, underwater in their mortgages, and looking for any means necessary to get back on a financially-healthy course.

Now, tax time is yielding another short-term problems for some cash-strapped citizens.

With tax deadlines just a few weeks away, tens of millions of taxpayers will owe the government. If you’re one of those taxpayers who owes in 2011 for the income of 2010, and find you cant pay, here are five tips to file away for your reference:

1.…

You may have heard the phrase “debt ceiling” being bandied about in the media recently. But few people outside of Washington D.C.’s Beltway, and in the current Congressional fight over raising it, truly understand what the term has to do with the proverbial “price of beans.” But financial experts warn that this unending political battle over how the country handles our national debt limit, could have lasting effects on average American pocketbooks.

First and foremost, the debt ceiling itself relates to the limit to how much money our federal government can borrow to pay for services. If  (and when) America needs to borrow more than the set limit, Congress must approve the hike.…

We know what you’re thinking.

Another stressful tax season has officially come and gone, and you’re either expecting a well-deserved refund or you owe an obligatory amount to the Internal Revenue Service.

Regardless, we understand you’d rather not think about (or, at least read about) anything regarding taxes, tax time, or the financial implications of this taxing period. But, trust us, it’s worth taking a gander at the following, as the end of tax season means the beginning of many a tax scam that might cost you more money (and time) than any IRS tab.

The Internal Revenue Service has now issued a statement warning average Americans just like you about how to spot and solve identity theft issues that stem from your recent tax filing.…

‘Tis the season for tax returns…and for many, tax refunds. So, if you’re one of the lucky Americans who is expecting money back from the Internal Revenue Service this year, you may also be aware of refund anticipation loans (also known as RALs). These tax time advances are being offered by some tax-preparation services as part of their seasonal packages.  And while getting what’s yours as soon as you can, especially from the IRS in tough economic times, can be appealing, there are various pitfalls to these refund anticipation checks, and reasons the federal government is trying to help you avoid them.…

With the holidays long gone and another New Year in full swing, ‘tis the season for 2010 tax filings, full of important tax changes for personal filers.  Here a few reminders of things to look out for as you work to get your returns in order:

(1) Payroll Tax Holiday
2011 is the year of the “payroll tax holiday.” This means that taxpayers subject to Federal Income Contributions Act tax (or FICA) for Social Security and Medicare will see a tax break of 2% in their paychecks up to the Social Security cap during the year, which is $106,800 for 2011.…

With so much talk of jobs on the eve of the 2010 midterm elections, many are wondering whether the millions of unemployed, disenfranchised by the lingering economic malaise, will feel empowered to take to the polls and elect the leaders they believe can bring back a level of prosperity to the nation, their states, their communities, and most importantly, their individual households.

But according to a recent report by Bloomberg, many unemployed are slated to sit out the very election focused on their specific plight. “Nick Barr, an out-of-work electrician, said the election is the least of his concerns. He’s lost his house and his truck, and has told his three kids they can’t play hockey anymore because he can’t afford the cost.…

Are you one of an estimated 26 million Americans who avoid bank accounts altogether because you fear banking excessive fees or are currently suffering from the very high fees others are trying to avoid? As a result, do you depend on expensive check cashing or tax refund loan services? Well, there’s suddenly hope out there for the unbanked or underbanked—especially during tax season

The U.S. Department of the Treasury has just announced a new Obama Administration pilot program that will give unbanked and underbanked Americans access to well-protected and low-cost financial accounts that are especially primed for those needing tax refunds in a timely manner.…

Just as Social Security seems to be running into the red—paying out more dollars than it’s taking in—it also appears the social welfare program has never been more important.  In its 75^th year, amid the worst economic crisis since the Great Recession, Social Security is acting as a financial lifeline to America’s most needy citizens.  And without it, the consequences would be dire.

Based on a recent report by The Huffington Post, “If [Social Security] benefits were to be significantly cut, 19.8 million more Americans would be thrust in poverty, according to a recent report by the Center on Budget and Policy Priorities.…

As Baby Boomers age into their rightful place at the retirement table, Social Security appears to be running into the red—literally paying out more dollars than it’s taking in—even after decades of prosperity and pay-outs.

According to a recent article in CNNMoney.com, this could leave many who do (and will) depend on Social Security in a rough economic spot during already tough financial times. “For the first time in nearly 30 years, the system will pay out more benefits than it receives in payroll taxes both this year and next, the government officials who oversee Social Security said on Thursday,” reports Annalyn Censky of CNNMoney.com.…

What was once a white picket fence is now a potential foreclosure; what used to be some measure of Social Security is now using retirement just to get by; what would have been the expectation of (and ability to) send your kids – all of them — to college, is now in question, along with all of the other trappings of a now-fleeting American Dream.

Like so many insights and incomes in these tough economic times, the middle class is shrinking—short-changed by everything from the fiendish financial industry to a hobbled housing market.

According to Arianna Huffington’s new book, “Third World America”, our country’s middle class is facing an onslaught from all sides, including several surprising facts average American’s should remain mindful of—and attempt to prepare for—as they forge ahead into a new reality:

Increases in Income Inequality
In the middle of this decade, the bottom 20 percent of household earners made an average income of $10,655 while households in the top 20 percent made almost $160,000.…

As we’re all aware, this decade’s Great Recession has dealt, and continues to deal, a significant blow to the budgets of many American families, leaving millions in debt, out of work, underwater in their mortgages, and looking for any means necessary to get back on a financially-healthy course.  Now, we’re finding that tax time 2010 is also yielding it’s own unique set of challenges for some cash-strapped citizens who may have had some of their debt forgiven or settled a debt for less than the full amount in 2009.

Have you had some of your considerable student loans forgiven? Have you recently reached a debt settlement with your credit card company?  Have you had a car loan settled or the debt forgiven?…

As you know by now, this country’s recent Great Recession has dealt, and continues to deal, a significant blow to the budgets of many American families, leaving millions in debt, underwater in their mortgages, perpetually jobless and looking for any means necessary to get back on a financially-healthy track.

However, there may be a silver fiscal lining to this year’s spring season: The Recovery Act’s tax credits. Now we’re seeing that tax time—normally considered a harrowing economic experience for many Americans—is yielding it a bit of a reprieve for some cash-strapped citizens struggling to stay afloat amid rising education costs, mortgages, and even car payments.…

As we’re all aware, this decade’s Great Recession has dealt, and continues to deal, a significant blow to the budgets of many American families, leaving millions in debt, underwater in their mortgages, and looking for any means necessary to get back on a financially-healthy course.  Now, we’re finding that tax time is also yielding it’s own set of challenges for some cash-strapped citizens.

In his recent New York Times article, “Paying the Price for Survival Tactics,” Charles Delafuente reports on how the I.R.S. treats many kinds of written-off debts, some distressed home sales, and many emergency withdrawals from retirement accounts as taxable income.…

If you are facing some serious financial problems, a guess that you are short on cash is not much of a stretch. Some people hesitate to file for bankruptcy protection because they believe they need to hire a bankruptcy attorney, but think they won’t be able to afford one. While they are absolutely right about the first part–an experienced bankruptcy attorney is essential to a successful bankruptcy–they may be surprised to learn how affordable legal services can be. Still, like most good things in life, the assistance of a qualified bankruptcy attorney won’t come for free; so how can you pay for it?…

The holidays are now officially over. The New Year has begun in earnest. And ‘tis the season for tax time. If you believe you’re bankruptcy bound in 2010, that definitely means it’s also time to get your 2009 returns in order.

Thinking About Chapter 13 Bankruptcy?

Chapter 13 bankruptcy helps restructure your debt into a more manageable payment plan—allowing you to pay back what you owe over time, often at a percentage of the cost. If you’re considering this type of bankruptcy, it’s important to remember that tax returns should be provided in Chapter 13 cases.  You must file all tax returns for all tax years – including returns for 2009.  Bankruptcy Code Section 1308 provides:

(a) Not later than the day before the date on which the meeting of the creditors is first scheduled to be held under section 341(a), if the debtor was required to file a tax return under applicable non-bankruptcy law, the debtor shall file with appropriate tax authorities all tax returns for all taxable periods ending during the 4-year period ending on the date of the filing of the petition.…

The New York Times recently published a story relating to one aspect of the foreclosure crisis that many a troubled homeowner will know all too well. When you’re struggling to hold on to your home, the main reason is obvious: for one reason or another, you cannot afford the big mortgage payments rolling in every month.  But the troubles don’t stop there: increasingly, homeowners are finding themselves squeezed to the breaking point by property taxes they can’t afford.  Unfortunately for many homeowners, the pictures gets even grimmer. The good news: they won’t be dealing with government tax collectors. The (really) bad news: they will be dealing with private bill collectors instead.…

Believe it or not, there are some situations when credit cards can be a benefit. They are often the only option when making travel reservations, and can come in handy in the event of genuine emergencies. A credit card can also help you build good credit, or rebuild credit after bankruptcy.

Yep, so that’s about four reasons. The reasons NOT to use credit can fill a book, but here are just a few situations in which using plastic seems like a good idea, but you’re much better off just saying no!

Department store credit accounts: notoriously high interest rates are just one great reason to avoid department store credit accounts.…

You may have heard that, even if you file for bankruptcy protection, you will not be able to discharge income taxes. This is simply not true. If the taxes are old enough, you may be able to discharge all or most of your tax debt. In many cases, tax liability will not be dischargeable because the debt is too new, as explained below, or because the taxes owed are in one of the categories which cannot be discharged according to the Bankruptcy Code.

As you may have discovered, the government has some powerful means to collect on taxes owed. Apart from taking tax refunds in order to apply them to taxes owed, the government can garnish your wages, place a lien on your assets, or even seize property like your bank accounts, your house, or your car.…

As you are probably well aware, bankruptcy is an important decision that should not be taken lightly. If you are eligible to file but hesitate to do so, you stand to lose more than you may guess. Dithering too long can ruin the strategic advantage of timing; deciding not to file at all could cause you to lose everything.

Take for example your car: if your car is securing a debt and you decide not to file for bankruptcy, a creditor may proceed with repossessing your vehicle. You may think you’re ready to lose your car should it come down to repossession, but consider this: the proceeds from the sale of the car undoubtedly will not cover the entire secured debt.…