Illinois bankruptcy attorney, Illinois det relief lawyerWithout a doubt, one of the most stressful aspects of facing debt is implementing a plan to get out of said debt. When personal or business bankruptcy is your last resort - as it should be - it is only natural to want to explore your alternatives, such as debt settlement with your creditors.

However, just as filing for bankruptcy can mean a lot of worry over the effects on your credit rating and record, attempting to negotiate debt settlements with your creditors presents its own set of challenges and concerns. The question is truly a matter of which path best suits your needs and the nature of your circumstances.

Taking the First Step

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Illinois tax attorney, Illinois IRS lawyerAlthough filing personal taxes on our own has become increasingly accessible and efficient in recent years, there are still many potential bumps in the road when it comes to managing our own taxes. Personal IRS problems can arise, such as missed payments, late payments, or installment plan errors, just to name a few.

This is where individuals often run into problems and end up owing more in fees, penalties, and interest, along with whatever taxes they owe. It is easy to fall behind and land in a financial hole in these kinds of situations, which is why it is so important to know what to do and where to turn when it is time to address damage control.

If you are late filing, make sure you have filed for an extension.

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Illinois chapter 7 lawyer, Illinois bankruptcy attorneyOut of the many financial problems that can arise, no other burden is quite as consuming or stressful as debt, especially when it is a significantly large amount. It is easy to feel swallowed up and hopeless when facing such an overwhelming financial hole, which is why it is important to know when to personal bankruptcy. If your debt is too large for you to handle and you cannot seem to get out from underneath the weight, bankruptcy can offer a way out, although it is not your only option.

When to Throw in the Towel

There are three main types of bankruptcy, but chapter 7 (also referred to as “straight bankruptcy”) is the most common option for debt liquidation. This allows you to eliminate most, if not all, of your debts, but this option is of course not without consequences. First, it severely damages your credit rating. In addition, it stays on your record for 10 years. Once you have filed this kind of bankruptcy, federal law prohibits you from filing again for another eight years. These reasons combined should cause you to pause before taking such a big step. While bankruptcy is not your only option, it should definitely be your last resort.

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Illinois tax attorney, IRS rights, Owing money to the IRS can be a stressful and frightening predicament. The calls and threats to seize your home or bank account only further exasperate the worry over what will happen next if you do not come up with the money to resolve your IRS debt. But what, exactly, do they have access to? Can they, for example, take your social security benefits? What about an inheritance? Or your retirement account? Unfortunately, the answer to all of the above is a strong and resounding, “yes.”

IRS Tax Levies and Your Inheritance

An inheritance – money or assets that did not belong to you until after the death of a loved one – are often placed in a trust account. Often, it is difficult for you, the heir, to access these funds in a quick or easy manner. But the Internal Revenue Service – a government entity – can gain access long before you ever see a penny. In some cases, you may not ever see the inheritance at all.

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Illinois bankrutpcy attorney, Illinois business lawyerDeciding to file for small business bankruptcy is not an easy decision. You must determine if staying in business is even an option (if not, chapter 7 bankruptcy may be your best option). Then you must determine which chapter you wish to file under. This part of your decision – one full of possible misinformation and legal complexities – is best made with the assistance of a skilled and experienced bankruptcy attorney. However, you can begin to consider your options by using the following comparison and information on chapter 11 and chapter 13 bankruptcies.

Chapter 11 and Chapter 13 Bankruptcy Similarities

Both considered a “reorganization” of your debt, chapter 13 and chapter 11 bankruptcy plans have a number of similarities. Each allows you to retain the property you need to continue your business (up to a certain value) while allowing you time to sell un-exempt assets to be placed toward your bankruptcy estate. Furthermore, each offers you the chance to pay back your creditors on an approved payment plan that is more manageable than your current obligations. Once you have fulfilled the terms of that plan, your eligible debts can be discharged and you will no longer be held liable.

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Illinois bankruptcy attorney, Illinois debt relief lawsLife can be unpredictable. Life can be messy and complicated. And, sometimes, the worst things that can happen to us are completely out of our control. But what do you do when the messy, unpredictable, and complicated lead to financial problems? How do you turn things around and regain control of your financial future? The answer really depends on where you are in the debt collection process. While some may be able to find a viable bankruptcy alternative, others may need more aggressive action. The following information may be able to help you in determining your best course of action against debt problems.

Creditor Harassment with No Negative Actions

If you have only just started receiving harassment from your creditors and have not yet received any notice of wage garnishment, tax or property liens, bank seizures, home foreclosure, or any other negative actions against you, you may be able to negotiate a repayment plan with your creditors. But, because not all creditors are willing to work with consumers, and because they have no incentive to actually help you, it may take the assistance of a skilled attorney to resolve the matter before things escalate.

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Illinois tax attorney, Illinois IRS lawyerIRS impersonation scams have been sweeping the nation, affecting taxpayers in nearly every state and nearly every major city. The problem is so big, in fact, that the Treasury Inspector General for Tax Administration estimates that taxpayers have lost more than $36 million to IRS financial fraud. If you owe money to the IRS, or are even somewhat concerned that you might, it is critical that protect yourself from these scams by knowing when and how the IRS contacts and collects money from taxpayers.

How the IRS Contacts Debtors

The Internal Revenue Service does not contact debtors by phone unless they have first contacted them by mail. So, if you have not received notice of an IRS debt by mail, you are fully within your rights to deny any calls from someone claiming to be an agent. If, however, you believe or suspect you may owe money to the IRS, you are encouraged to disengage from any threatening phone call and contact the IRS directly for help or more information about your debts.

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Illinois bankruptcy attorney, federal bankruptcy rulesWhether you are planning on filing for bankruptcy or simply need assistance developing a budget, credit counselors can provide you with the tools and resources you need. Unfortunately, not all credit counselors are created equal. In fact, some can leave you worse off than when you started, which makes finding an experienced, reputable credit counselor absolutely essential for your financial future. The following tips can help you find the one most suited for your needs and preferences and improve your chances of finding the financial empowerment you are looking for.

Know Why You Need a Credit Counselor

Each credit counseling agency and provider has an area they are most skilled at. As such, it is critical that you first know why you need credit counseling. To find the answer, consider your goals and examine your current financial situation. If you are filing for bankruptcy, then you will also want to ensure you find a credit counselor that is approved by the United States Department of Justice since those who are not accredited will not be accepted by the courts.

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Illinois bankruptcy attorney, federal bankruptcy lawsBankruptcy can help debtors turn their lives around, but it is a highly complex process with a lot of potential pitfalls. Landing in one of them can have consequences that range in severity, from difficulty in getting the bankruptcy discharged to a full-on bankruptcy fraud investigation with additional consequences, if found guilty. If you are planning on filing for bankruptcy, know your risks and how you can best avoid these possible consequences.

What Is Bankruptcy Fraud?

Bankruptcy is intended for those that cannot afford to pay back their creditors. If, however, one files simply to avoid paying debts they owed, they can be found guilty of bankruptcy fraud – a broad term used to describe any and all intentional abuse of the system. This can include:

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Illinois chapter 7 attorney, Illinois chapter 11 attorneyMost people who file bankruptcy really do need help. Likely drowning in debt for months, sometimes because of events they could not have prevented or predicted, they just need a chance to breathe again. Bankruptcy – be it chapter 7 bankruptcy or chapter 11 – may provide such relief (at a cost). There are, however, those who attempt to scam the system. An Illinois woman and former gym owner is being accused of doing the latter.

Bankruptcy Petition Shows Tax Obligations and Income-Debt Disparity

Filed in 2014, the former gym owner’s bankruptcy petition indicated a major disparity between assets and liabilities ($276,440 and $5.6 million, respectively). Income, which was said to include Social Security and unemployment benefits, was said to be $3,640 and monthly expenses were said to fall at $5,125. In addition, the Illinois woman indicated she owed $27,000 to the Illinois Department of Revenue and had a federal tax lien from the Internal Revenue Service (IRS) in the amount of $93,538. In short, the information disclosed supported the need for bankruptcy.

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Illinios tax attorney, Illinois IRS lawyerOver the last five years, budget cuts have reportedly led to massive staff shortages within the Internal Revenue Service. As a result, the frequency and rate of tax audits has decreased, and efforts to collect delinquent taxes through liens and levies has slowed. Essentially, many taxpayers, businesses, and sole proprietors may have slipped through the cracks. But evasiveness may soon be a thing of the past – at least for most - thanks to the addition of 700 new IRS agents.

First “Hiring Spree” in Years Will Fill IRS Enforcement Gaps

The upcoming addition of hundreds of new enforcement agents might not put the IRS back at full capacity, but this hiring spree – the agency’s first in more than five years – is expected to fill current gaps in their enforcement workforce. As such, the agency will be able to better pursue those who are suspected of tax fraud and tax evasion. But they are not the only ones that the IRS will pursue. In fact, everyone from individuals to large businesses and corporations could soon cross paths with the “new and improved” IRS task force.

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Illinois bankruptcy attorney, medical debtThe diagnosis of cancer, in and of itself, is devastating. But then to learn that you may spend the rest of your life in debt or file bankruptcy because of the cost of treatment? It is difficult to fathom the mental and emotional impact of such news, yet is said to be the reality of approximately one-third of all cancer survivors. Are you at risk? Information from a recent study may help you decide.

Prevalence and Factors behind the Cancer and Debt/Bankruptcy Relationship

Healthcare costs have risen sharply over the last several years, but cancer care costs have increased exponentially - two to three times faster than any other type of healthcare expense, in fact. Now, a patient can expect to spend anywhere between $10,000 to $60,000 per month for one cancer therapy agent. Most cancer patients need more than just one. So, for just one year of treatment, patients could be in for more than a quarter of a million dollars, just to get started on treatment.

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Illinois tax attorney, federal tax laws, Illinois IRS lawyer

Tax season has come and gone. For some, those words are said with a sigh of relief. But for others, the end of tax season came with a debt; their emotional response is more likely stress, worry, or even fear. All of these, and more, are understandable, but the reaction that often follows – avoidance – is the absolute worst one to have. Instead, take a proactive approach, learn what your options are, and learn how you can resolve your IRS debt with the least amount of pain possible. 

If You Have Not Filed

If you missed the deadline or already knew that IRS debt would be a problem and failed to file, the first and most important step is to file as soon as possible. Not filing does not prevent you from having to face penalties and will, in fact, result in bigger problems. Failure to file penalties are significantly higher than failure to pay penalties (4.5 percent in interest versus .5 percent). Even more troubling is you’re your failure to file can send the wrong message and may impact the severity with which the IRS pursues the money owed to them.

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Illinois tax attorney, Tinley Park IRS lawyerWhile small businesses may not attract quite as much attention from the Internal Revenue Service (IRS) as larger corporations, they are still at risk for an audit. This risk, paired with loose or faulty record-keeping practices can lead to serious IRS problems for small businesses. In contrast, those that keep good records, and for the length of time required, are less likely to experience problems. Know and understand your obligations as a small-time business owner and protect yourself from IRS debt.

Prevalence of Audits and Their Results

Of the tax returns filed in 2014, the IRS audited less than one percent of all filers. In total, this amounts to almost 1.4 million businesses and individuals. Those audits resulted in a total of $25 billion in additional taxes recommended by IRS agents and an additional $7 billion in refunds. As such, it is safe to assume that, under most circumstances, an audit results in owing additional taxes. There are, of course, a few exceptions.

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acquisition, Illinois business lawyerInversion, an international merger that allows a company to relocate its headquarters on to foreign soil, is not always done with the intent to avoid paying U.S. taxes (but sometimes it is). And, unless the company provides misrepresented information on a tax return or uses of intentional and illegal acts to hide assets, the process is not considered illegal. But the Internal Revenue Service (IRS) and U.S. government does not necessarily favor the concept, particularly when such mergers are done in the spirit of personal gain rather than economic efficiency. As such, they have passed new rules to further restrict corporate tax-dodging and, consequently, inversion altogether.

New Rules Take a Stab at ‘Cherry-Picking’ and ‘Stuffing’

Over the last few years, the U.S. Treasury Department has devised several new rules to make inversion less appealing for companies. For example, the action under 956(e) aimed at preventing ‘hopscotch” loans, which were allegedly used by some U.S. corporations as income but were “loaned” by the controlled foreign corporation (CFC) to reduce the amount of taxation received on said income. The new rules specifically take a stab at acts known as “stuffing” and “cherry-picking.”

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Illinois bankruptcy attorney, Illinois chapter 7 lawyerIf you are thinking of filing for bankruptcy, then you have probably been dealing with financial troubles for quite some time. But you may also be worried about what life will look like once it is all over. Is it as bad as creditors say it is? Once you file, is there anything you can do to reestablish your credit? The short answer to both of these questions is yes, but, just like with most aspects of credit, the in-depth answer is a bit more complex than that.

A Fresh Start . . . Sort Of

On one hand, bankruptcy offers a fresh start. For chapter 13 filers, this comes in the form of knowing that your debts will be paid through the reorganization process and in the cessation of constant calls from your creditors. For chapter 7 filers, it is a chance to completely walk away from debt. Unfortunately, this fresh start comes at a pretty hefty price.

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Illinios tax attorney, IRS deadlineWith the end of tax season just mere days away, late filers may be scrambling to get their returns prepared and filed on time. Another 20 percent will still wait until just two weeks before the deadline. Unfortunately, both groups may experience more than just stress; procrastination may also lead to avoidable mistakes and increase costs and risk of having to file an extension.

Tax Preparation Costs Increase in Last Month before Deadline

There is a little known secret when it comes to tax preparation costs; most software programs and online filing tools increase their costs for late filers. Take the online filing program, TurboTax, for example; they increase the prices on their products by as much as 25 percent after March 17th. On the other hand, H&R Block’s online filing software has remained the same price, but according to CBS News, some of their free filing options from earlier in the season have completely disappeared.

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bankruptcy-and-social-mediaMost people share intimate details of their lives on social media – vacations, places they shop, purchases they make, and even what they wear. Unfortunately, this form of sharing can sometimes have legal repercussions. Take, for example, the current issues being faced by the famous rapper, 50 Cent.

Last year, Curtis Jackson, otherwise known as 50 Cent, filed for chapter 11 bankruptcy protection last year. Smack dab in the middle of it all, he posted several Instagram photos with loads of cash – one of a stack of money in his freezer, one in which bills were arranged to spell the word “Broke,” and one of him surrounded by stacks of cash on a bed. He says the bills were props, such as those used in music videos, but his creditors and the judge are far from amused.

According to the New York Times, 50 Cent states that the postings are essential to maintaining his appearance and securing his future. When his history of merchandising deals and “living large” are mixed with a number of failed business ventures and several lawsuits, it becomes difficult to determine whether he is hiding assets or telling the truth. Because of this, his creditors are asking for a reevaluation of his assets, and a judge is reportedly pulling him back into court to speak about the matter.

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Ilinois tax attorney, IRS issuesAs the deadline to file your income taxes draw nearer, you may be feeling a little rushed. But that rush could lead to some costly mistakes on your refund; experts are encouraging you – and every other late filer – to resist the urge to rush and ensure you do not forget the important details.

Know and Beware of Common Mistakes

Whether filing your taxes or filing for an extension, it is important to know and beware of common mistakes. Experts say that most common are experienced are those filing manually, especially those that are filing their extensions manually. This is because, even though the extension itself is automatic, there is still a manual form on which you must estimate how much you might owe. As such, tax experts suggest everyone seek assistance from a professional, especially if they are filing an extension.

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Illinios bankruptcy attorney, Illinois tax lawyerPassed by Congress in 1994, income-based student loan repayment programs are meant to help borrowers with low income to debt ratios avoid default. About 4.2 million Americans are using one of the five existing programs, many of which will forgive any remaining debt once the repayment term is complete. Unfortunately, there is a largely undiscussed catch that could result in the need for bankruptcy later in life.

Loan Forgiveness and Your Taxes

Any unforgiven debt is considered income by the Internal Revenue Service (IRS). As such, once a student loan is forgiven, it must be claimed as income on your federal tax return. The resulting tax bill, which is dependent upon the amount forgiven, could be financially crushing. Many may be left with no alternative but to file bankruptcy to get out from underneath the cloud of debt left behind after completing the repayment program.

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