Posted by LWM Team on Thu, Jan 07, 2010
Many taxpayers consider bankruptcy with the intent of being released from their tax debt. Tax relief may be thought of by some as motivation for bankruptcy, but going through with filing should be avoided if at all possible. When using bankruptcy as a form of tax relief, there are some essential facts that should be understood.
Filing for bankruptcy is one option for alleviating tax debt; however, it is not recommended. Taxpayers who are considering Chapter 7 bankruptcies should be sure they have all of the facts before doing so. Your odds of being released of your tax debt through a Chapter 7 can-in reality-be rather slim, not to mention that this is a rather costly method of eliminating tax liabilities. This route should be your absolute last resort after exhausting any and all other options available to you; in other words, "Plan Z" on your list.
Filing a chapter 13 bankruptcy is also a method that should be used as a last resort. With a Chapter 13 bankruptcy, the IRS can work out a payment plan for taxes owed. With this action, debt owed to the IRS is never forgiven, just delayed through a long series of painstakingly extended payments. Not only is bankruptcy in any form less promising than other more moderate tax relief methods, but it can also ruin your credit. On the other hand, if you have serious credit issues already, you may see no harm in filing bankruptcy.
You must understand that bankruptcy was not designed as a bandage or cure for tax issues. Certain laws allow the IRS to collect on back taxes even if a bankruptcy is in effect. It is all quite complicated, even when broken down into layman's terms. Tax relief is one of those areas that you do not want to guess on. One wrong move could leave you in a worse situation than the one you were initially trying to get yourself out of.
Posted by LWM Team on Thu, Jan 07, 2010
Some people will do anything for attention, but playing games with the IRS takes attention-seeking to a whole new level. Those who fool around and neglect to promptly pay their portion of that crazy, burdensome ransom otherwise known as taxes, which is so eagerly collected each year by the IRS, will inevitably find themselves in search of IRS wage garnishment help.
Uncle Sam does not care about excuses or your other expenses. Your job or health status is not something the IRS concerns itself with. Regardless of your perception, if the IRS says "pay" and you fail to jump right up and do so, you are asking to become a victim of wage garnishment. Imagine going to work all week and only getting a small fraction of your hard-earned money to survive on while the IRS nabs the rest for your delinquent taxes.
IRS wage garnishment help comes in small packages, so to speak, as there are certain procedures that must be followed before a garnishment can be attached to your earnings. These guidelines can actually save you in the long run. The biggest thing to remember is that before your wages can be garnished, you must be in default.
If you are in default, you have to be warned ("informed" is more like it). You will be given around 30 days notice from your favorite uncle as to the impendence of your financial doom. When you receive your friendly warning letter, you better get on the ball!
The best time to stop wage garnishment is before it starts. Truth be told, the IRS would rather have it that way. There are other arrangements which allow you to work out some form of IRS wage garnishment help.
A few of the options you have are: to pay what you owe the IRS in full, file for an offer in compromise, set up payment arrangements, be declared uncollectible, change jobs, or even file for bankruptcy. Remember though, you only have 30 days to work something out with the IRS to avoid wage garnishment.