Debt forgiveness occurs when your bankruptcy case is closed, upon foreclosure, or short sale of a primary residence.
If your home is underwater and is given up in foreclosure or sold as a “short-sale,” the IRS will issue a 1099-C and come after you for the deficiency because debt you no longer have to pay back [...]
Boston Bankruptcy Attorney Answers Chapter 7 & 13 Bankruptcy Questions
Tag Archive: Chapter 7
Tax Implications of Debt Forgiveness
What Happens If I Left Out Listing Some Creditors During Bankruptcy?
If you have what we categorize as a “no-asset” (means that the debtor has no money left over in the bankruptcy estate that the Trustee or creditor can claim) case in a Chapter- 7 Bankruptcy in the Greater Boston area, and you miss some creditors, chances are that your debts will be forgiven in Bankruptcy, [...]
What Happens if I Take Money Out of My Retirement Account During Bankruptcy?
Retirement accounts fall outside of bankruptcy in the Greater Boston Area. This means that the bankruptcy trustee cannot touch it for up to $1,050,000.
Once some money is taken out however, then the net amount left over after fees and taxes will be included within the bankruptcy estate and the trustee can touch it to pay [...]
The Tax Implications of a Bankruptcy Discharge in Boston
Debt forgiveness occurs when one’s bankruptcy case is closed and upon foreclosure and short sale of debtor’s primary residence.
If your home is underwater and given up in foreclosure or sold as a “short-sale,” the IRS will issue a 1099-C and come after you for the deficiency because the debt that was forgiven is considered an [...]
What If I Have Been The Beneficiary of Additional Erroneous Social Security Payments?
There are many cases where erroneous overpayments were dispensed by the Social Security Administration, Welfare or Unemployment agencies. These government agencies often try to recoup the overpayments by garnishing from future payments of the recipient. This often leads to hardships, ones that the recipients did not intend.
The Bankruptcy Court in the Boston area will look [...]
What’s better – short sale or bankruptcy?
Filing for bankruptcy might be preferable to a short sale if you have a recourse mortgage loan and you have other debts besides your house. A Chapter 7 bankruptcy filing can discharge the mortgage debt as well as any personal obligation for a second mortgage or line of credit (given that you’ll no longer live [...]
If I’m married, do we both have to file for bankruptcy together?
The answer to that question depends on many factors such as the level of income of both parties, and whether debts are joint debts.
If one spouse accumulated the debt prior to marriage, then he/she may file without involving the other spouse. However if the debt is jointly held, then both will have to file together [...]
What is an “order for relief” from bankruptcy?
An Order for Relief acts as an injunction to stop creditors from collecting on outstanding debts for the duration of the bankruptcy case (often 3-4 months) . As soon as a case is filed with the Bankruptcy Court in Boston, all creditors are notified by mail and this notice acts as an injunction. If during [...]
What if I don’t tell my attorney about extra cash I’m hiding?
One week before the 341 meeting takes place (often one month after filing), the Bankruptcy Trustee requires you to submit your previous year’s bank statements. If, however, you hold extra cash not reflected in the statement balance, for instance, in a mattress, then you should report this to the Attorney or the Trustee.
A bankruptcy attorney [...]
Do I have to give up my tax refund to the bankruptcy trustee?
A tax refund is the property of the bankruptcy trustee. The trustee can use that money to pay off your creditors.
However, if you don’t have much equity in your home and chooses the Federal exemptions, then you may be able to keep the refunds provided the $11,000 of wildcard exemptions cover that amount and the [...]
