Tinley Park small business bankruptcy attorney, small business bankruptcyDespite its increased use and benefits, there are still misconceptions about bankruptcy. This is perhaps most damaging when it comes to filing for bankruptcy as a small business. Owners may fear it will damage their credit, or that they will ultimately face closure if they file. Hence, they continue to trudge through debt, possibly putting the future of their company at risk. If you are a small business owner in serious debt and considering bankruptcy, the following can help you understand the misconceptions about bankruptcy and assist you in deciding if it might be the right option for your company.

Understanding the Purpose of Small Business Bankruptcy

If you are considering bankruptcy for your small business, you are probably having a difficult time meeting your financial obligations each month. In fact, your company may already be bankrupt. At the very least, it is heading in that direction. To ignore this is not only poor decision making, it could potentially lead to personal financial issues and the closure of your business. Bankruptcy may help you avoid such issues. In fact, some companies manage to negotiate the terms of their debts, consolidate, and pay off their creditors while keeping their businesses open and running. When used in this way, bankruptcy could be more of a benefit and less of a hindrance to your company’s future.

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tax liability, Cook County business tax and IRS defense attorneyWhatever the nature of your business, as an owner you are presented with a number of responsibilities and obligations that must be continually met in order to maintain a successful, profitable operation. Properly managing your business tax responsibilities is one surefire way to ensure you stay on track and out of trouble with the IRS.

Keeping your tax record in check is one task that you cannot afford to drop the ball on, especially when it comes to properly reporting information about the employees who work for you. Obeying basic IRS guidelines can help your business avoid financial penalties and other consequences that can damage your company’s well being.

New Hire Checklist

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Cook County IRS tax attorneys, 2016 tax seasonTax season is just around the corner, and that means everyone is preparing for their 2016 return. The following covers some of the biggest changes for the 2016 tax year and what these changes might mean for your return. It also provides some important information on what you can do, should you find yourself indebted to the IRS this upcoming tax year.

Inflation Adjustments to Affect Millions of Taxpayers

Each year, the IRS adjusts tax laws to compensation for inflation. Yet levels have been rather low over the last several years. This trend is expected to continue during the 2016 tax year. However, there are some changes that may affect your return. Those to look out for include:

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Cook County tax law attorney, Chapter 11 bankruptcyBankruptcy is never the first course of action an individual considers when addressing his or her mounting debt. Going bankrupt is typically a last resort used to restructure a large amount of debt that is no longer manageable, and to essentially wipe the financial slate clean. Even then, the process requires sacrifice, particularly when it comes to your credit scores, which suffer a very serious hit. Buying a home or car or obtaining any loan following a bankruptcy can be extremely difficult, and the only fix comes from the passage of time.

The Purpose of Chapter 11

Still, resorting to bankruptcy offers significant relief to individuals and business owners when filed properly with a trustworthy professional. Chapter 11 bankruptcy in particular is typically utilized by corporations or large business owners, but individuals who possess large assets and equally large debts also turn to Chapter 11 when they are looking for a fresh start.

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Cook County tax law attorney, past due tax returnsAs an individual or a business owner, anytime you neglect to pay your taxes or file incorrectly, you face a number of potential IRS issues. Many of these issues have the power to cost you big dollars, headaches, and lost time. Although collecting all the necessary information to properly file your taxes can be time consuming, fixing IRS issues that resulted from neglect or incorrect filing is often far more time consuming, not to mention stressful. Hence, this is why it is important to get it right the first time around.

Time is of the Essence

If you have fallen behind on filing your taxes, the key is to work with a professional to resolve the issues as quickly as possible, before the problem turns more complicated. The sooner you address your past due taxes, the sooner you can get back to work or running your business. There are multiple advantages to taking care of your past-due taxes as soon as possible. If you continue to wait, you may lose out in the following ways:

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 Cook County bankruptcy attorney, chapter 11 bankruptcyNo matter what the circumstances look like, the decision to file bankruptcy is never an easy one, especially for business owners who must stand by and watch the business they have worked so hard for suffer heavy, often life-changing, financial loss. The choice to take the leap to declare bankruptcy should never be taken lightly, as it requires a great deal of evaluation of one’s financial situation in order to decipher whether or not the benefits outweigh the disadvantages.

Is Bankruptcy a Good Fit for Your Needs?

If you are a business owner sinking in debt and have decided it is time for some relief, filing for chapter 11 offers a number of advantages. Yet like all forms of bankruptcy, Chapter 11 requires a certain amount of sacrifice. The process itself is very complex and takes time to resolve in entirety.

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Cook County tax law attorney, bankruptcy and debtAlthough an extreme course of action—and typically a last resort for many individuals and business owners—bankruptcy offers a plethora of advantages when it comes to essentially wiping the financial slate clean. Bankruptcy can release you from a multitude of debt liabilities and give you a chance to start over, but it comes with a steep price tag: Your credit. If you are filing for bankruptcy, chances are good that your credit is not great to begin with. However, the moment you actually file, you can kiss any remaining good credit goodbye for up to a decade. 

Inescapable Debt

Despite the detrimental hit to your credit, bankruptcy can, in many cases, be more helpful than harmful, depending on your circumstances. Each case is different and the decision to file should be thoroughly considered beforehand. Another factor every individual and business owner should be aware of before filing is the subject of debts that cannot and will not be discharged. You will still be responsible for the following five debts, regardless of your bankruptcy status: 

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Cook County tax law attorney, IRS issuesWhether you are a sole proprietor or part of a partnership running your own business, there are a number of financial obligations you need to be aware of as you operate as a self-employed individual, especially when it comes to IRS issues.

Being a business owner of any sort is always a challenge, but when you function as your own boss, staying on top of your financial responsibilities can easily become overwhelming, particularly when you are unclear on the nature of those responsibilities. Do not let your confusion cost you big dollars. Keep yourself out of hot water with the IRS by following these three guidelines when you are self-employed:

1. Ensure you file your annual return. This essential process will keep you in the line with basic IRS tax filing requirements. You will need to report your income and any loss from your business using either a Schedule C or Schedule C-EZ form. If your expenses were $5,000 or less, you may be able to use the Schedule C-EZ form. You will also need to report your Social Security and Medicare taxes using the Schedule SE form. There are instructions for each form, which can be accessed via the official IRS website, as well as through your private accountant.

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Cook County tax law attorney, student loan borrowerWhen deciding whether or not to file for bankruptcy, one must first consider a number of factors. Bankruptcy, in general, offers several significant benefits for those sinking in debt. However, it comes with a big price, especially where credit standing and the ability to be approved for future loans is concerned.

This matter is particularly troubling for student loan borrowers, as many borrowers have difficulty getting their loans discharged after they decide to file. Borrowers are often required to continue re-payment, which can feel like taking 10 steps back after seeking financial relief through the bankruptcy process.

The Student Loan Exception

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IRS collection notices, Tinley Park IRS tax attorneyReceiving a notice from the Internal Revenue Service (IRS) can be jarring and even a little frightening. Granted, not every letter from the IRS is a bad thing. Still, there is important information in each notice. Therefore, regardless of the reason you think the communication has been sent, it is important that you take the time to read it carefully, ensure you understand what it means, and know what action (if any) should be taken. Further, you should know how to effectively deal with communication from the IRS. The following information can help.

What Does My Letter from the IRS Mean?

The IRS does not send arbitrary letters. In fact, they do not take the time to send notices unless they have something rather important to communicate to you. Such communications might be used to:
  • Notify you of a delay in processing your return;
  • Let you know that you have a balance due;
  • Request that you verify your identity;
  • Request additional information from you;
  • Communicate a change that was made on your return;
  • Ask a specific question about your return; or
  • Notify you of a larger or smaller refund. 

Effectively Handling a Communication from the IRS 

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personal bankruptcy, financial restoration, Cook County bankruptcy attorneyThe road to serious debt and circumstances that lead to personal bankruptcy begin with small steps that snowball and create a much larger, looming problem. The moment you realize you owe more money than you make each month, you have already begun traveling down the slippery slope to financial crisis. Such crisis does not have to end in ruin, however. Recognizing debt hurdles and tackling them as soon as you acknowledge them gives you the opportunity to regain control and ultimately put your financial life back in order, before it is too late.

Debts That Lead to Serious Damage

There are a number of debts that can work against you when you allow payments to fall behind. However, certain debts in particular can really wreak havoc on your financial life: Credit card accounts, mortgage accounts, and bills owed to the IRS are especially risky when neglected. Should you fall behind on these kinds of payments, you may be looking at serious penalties that can potentially lead to devastating financial loss.

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Cook County bankruptcy, personal bankruptcyEvery year, countless people fall victim to personal bankruptcy for a number of reasons, but regardless of the cause, one thing is certain: No one intends to go bankrupt. Ultimately, the decision to file for bankruptcy is a choice, but it is never a fun one to make, especially when you never saw it coming.

Driving Factors

Usually sought after as a last resort to address overwhelming financial deterioration, bankruptcy is a helpful tool for those requiring a fresh slate, although it is not a process to take lightly, as it comes with a myriad of consequences. Destroyed credit is typically the most damaging consequence of filing, which can—and should—cause individuals to think twice before making the call to file. Those on the cusp of declaring bankruptcy often find themselves in such a position due to the following factors:

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Tinley Park bankruptcy lawyer, bankruptcy mythsThere are a lot of negative perceptions about bankruptcy. On one hand, those perceptions are well-deserved. After all, there are some potential drawbacks to filing. Yet there are also some major misconceptions about bankruptcy—some of which could keep someone from filing when he or she really should. The following information is designed to debunk these myths. It may even help you decide what your next step should be, and if bankruptcy might be the right solution for you.

Myth 1: Bankruptcy Ruins Your Credit

True, your credit can take a hit after filing for bankruptcy, and it may be difficult to obtain new lines of credit once the process starts. However, bankruptcy does not completely ruin your credit. If anything, it gives you a clean slate to start over. It is also usually less damaging than continuing to make late payments on your debts. If you are still a little apprehensive about filing, talk to an experienced bankruptcy attorney for a comprehensive analysis of your financial situation.

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Posted on in IRS Issues

Illinois tax lawyer, Illinois IRS attorneyWhether you are a sole proprietor, own a large business, or work for a corporation, when tax season rolls around, it can feel like a blessing and a curse. Depending on your circumstances, you may rejoice over a refund due to you or cringe when that bill you owe the IRS arrives in your mailbox. Regardless of where you stand when it comes to filing taxes, one thing is certain: Tax season can hurt if you are not properly prepared.

Staying One Step Ahead of the Game

To ensure you are looking out for your financial best interest and making the tax filing process as efficient - and painless - as possible, it is important to arm yourself with as much information as you can and prepare ahead of time, before you file. Looking under every rock and staying up-to-date on any potential tax breaks you may be eligible for months before you file can offer you an advantage when it’s time to report those numbers.

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Illinois bankruptcy attorney, Illinos chapter 13 attorneyRecognizing and admitting financial defeat is never easy. Acceptance really is the first step in the quest for positive change in your financial life. Just because you must come to terms with financial disappointment does not mean complete financial failure, however. While the mere thought of bankruptcy is enough to send anyone into a panic-induced spin, the reality is bankruptcy can and often does have a bright side in the long run, when examined carefully beforehand and chosen wisely.

Three Signs It Is Time to Throw in the Towel

In a perfect world, bankruptcy would be avoided by establishing and maintaining sound financial footing. A proper budget, eliminating debts, and living within our means is the ideal scenario. There are times when circumstances beyond our control take over and we have to know when to say when. In any case, bankruptcy should always be approached with caution and pursued as a last-resort option. Certain factors are tell-tale signs that it is time to throw in the towel, however.

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Illinois tax attorney, Illinois IRS lawyerMost of the time, when people think of consequences that result from neglecting to pay taxes, they automatically think of serious fines. While it is true that the issuing of fines is one of the first courses of action you can expect the IRS to take when you owe them money, there are a variety of other actions the IRS can take to collect any debts you owe. If you are not careful, the penalties can extend far beyond isolated charges for paying late or for failing to pay at all.

Here are three other ways the IRS can penalize you for neglecting to pay your taxes:

1. Interest Charges

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Illinois bankruptcy attorney, Illinois debt settlement attorneyWhen the bills have piled up, debt collectors begin calling you, and you see no relief in sight, you might begin to question the idea of debt settlement and its advantages to you as a consumer, sole proprietor, or small business owner. Whether you have personal financial troubles and are considering bankruptcy or your business is sinking due to loss in profit or changes in the economy, wanting to turn to debt settlement to alleviate or completely eliminate your financial burden is understandable.

Debt Settlement Has Its Own Risks

Before pursuing any settlement action, it is important to be aware that debt settlement has its own risks. Just as there is a cost to your credit score when filing bankruptcy, working with debt settlement companies can cost you something in the long run if you are not careful and informed before entering into an agreement with them. Typically, debt settlement companies are for-profit companies who work to negotiate with your creditors, on your behalf, to help resolve your debt. The term “settlement” essentially means a lump sum of money. This sum is usually less than the total amount you currently owe.

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Illinois tax attorney, Illinois bankruptcy lawyerStaying up-to-date on changes in state tax laws can be tricky, but is certainly helpful when it comes to protecting your best interest as a taxpayer. Significant changes, no matter how minor, have the power to seriously impact your wallet and your lifestyle. Whether you are working to manage your personal finances or keep your small business in check, every dollar counts.

One recent development that could potentially affect Illinois drivers and their money is a newly proposed tax that would tax motorists according to the distance they drive. Proposed by Senate President John Cullerton, this tax concept stems from the need for various road repairs throughout the state and the drop in gasoline tax revenue, an inevitable result of having more eco-friendly cars on the roads.

Legislators are hoping the funds will go toward the much needed repairs, replacing the existing tax on gas for state residents. Cullerton’s stance is that although eco-friendly cars offer better mileage, they still contribute the same wear and tear on Illinois roadways. Money for road repair needs to come from somewhere, and state taxpayers are first on deck.

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Illinois bankruptcy attorney, Illinois debt collection lawyerIt is only a matter of time before those struggling with debts they can no longer manage turn to the option to file for bankruptcy. Although personal bankruptcy is not a step that should be taken lightly, nor is it ideal, it is at times the best course of action for relieving yourself from debt that cannot be settled with creditors.

Where to Start

Regardless of this truth, bankruptcy is still not for everyone. If you have the ability to speak with your creditors and settle your debts without going bankrupt, then you need to know what you are up against and how you can obtain protection from creditors and put a stop to the harassing phone calls and letters.

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Illinois bankruptcy attorney, Illinois Chapter 7 lawyerOne of the biggest fears individuals and business owners share when it comes to filing for bankruptcy is what the consequences will mean for their financial future once all is said and done. Understandably, filing for bankruptcy is a big step and it is not something to be taken lightly. There are warnings galore about the negative impact it will have on your credit score and your ability to take out a loan or mortgage, as well as what it will do to your potential opportunities for future financial growth.

Reality Versus Myth

The truth is life really does go on after bankruptcy, but most importantly, you can do more than simply survive afterward; you can thrive after filing for the dreaded “B” word. One of the biggest misconceptions most people have is that bankruptcy equates to financial doom, and that there is no hope for the future once you take the leap.

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