Paying taxes on debts that are forgiven or cancelled is a concern on the minds of many people who come to my office for advice. They are worried about having to pay additional taxes as a result of resolving issues with their creditors. These tax questions can surface in short sales, debt consolidation arrangements, mortgage modifications, bankruptcy, or any transaction where the bank or creditor receives less than the amount originally owed.
Many Orlando homeowners who consult with us are concerned that filing bankruptcy will leave them homeless. This is not true. Bankruptcy can be a very useful tool to protect your interest in a home and avoid losing it in a foreclosure action. An affordable bankruptcy lawyer can be invaluable in understanding this process.
For some people, filing a personal bankruptcy can provide the opportunity for them to reset their finances and give them hope for the future. It can provide a new chapter free from the debts that many times accrue through no fault of the debtor. A bankrptcy doesn’t mean a person is irresponsible; many times, unintended debts can pile up leaving few options. Medical emergencies, natural disasters with not enough insurance, and unforeseen home or car repairs are just a few of the ways unintended debts can pile up.
The decision on whether or not to file some sort of bankruptcy is a big one and it will affect your finances and credit for years to come. And although the number of bankruptcies filed has been dropping in recent years, there were still over 800,000 filed in the year 2016 in the U.S. Bankruptcy in Florida, which makes it a very busy place. In January of 2018, the bankruptcy court in Orlando had 1203 Chapter 7, 26 Chapter 11 and 529 Chapter 13 cases for a total of 1758.
Whether you are trying to pay off debts before or after a bankruptcy filing, there are a number of things you need to do to avoid mistakes along the way. Over 94,000 people file for bankruptcy in the state of Florida each year. For those who file for Chapter 13 bankruptcy, finding a way to make the payments they have agreed on to their creditors is a must. Neglecting to pay these debts may lead to the need for a second bankruptcy filing. Below are some of the things you can do to make yourself a lean and mean debt paying machine.