What is bankruptcy? Bankruptcy is the most sophisticated financial planning tool available to consumers. It’s not about cheating your creditors–it’s really about being a responsible person and getting your financial act together so that you can take care of yourself and your family. The bankruptcy laws are mandated by the US Constitution for the purpose of giving people a fresh start and a second chance. Do I have to disclose all of my assets and all of my debts? Bankruptcy is a process of full disclosure. You are required to disclose all of your assets and all of your liabilities, as well as all of your sources of income and other benefits and your current monthly expenses. You can’t pick and choose which assets or…
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Happy New Year from Attorney Mike Shovan with the Bankruptcy Doctor
2010 has been an incredible year of growth for us with the Bankruptcy Doctor at the Bay Area Bankruptcy Clinic. I have been able to counsel many individuals and families and give them good direction in getting their finances back in order. In 2011, our online services will grow and we will be able to provide even more assistance. You are family. Please accept my best wishes for a new and prosperous year. Just remember 2 things: The past does not equal the future; and, God’s delays are not God’s denials. Mike
12 Factors to Consider in Deciding Whether You Can Keep Your House
1. Why did you get behind in your mortgage? Was it because of a temporary issue (sudden illness that you have recovered from) or some other short term financial emergency? Or, was it because of a longer term issue like a job loss, divorce or permanent disability? 2. What is the current fair market value of your house? Is your home worth what you owe on it? Do you have equity in the home? How long will it take before you have positive equity in your home? Is the home a financial benefit or burden to you? 3. How much longer do you expect to stay in your house? Are your kids getting older and ready to move on? Does your current house meet your…
Can you help me with my bankruptcy in Bay City Michigan?
I have helped a lot of families in Bay City Michigan with their bankruptcy matters. I serve families and individuals throughout Mid Michigan including Bay City and Bay County. If you have any questions concerning your financial situation, please call me at (989) 233-9389. I will answer your questions and help you figure out a plan to regain your financial freedom. You may also want to check out my website at bankruptcy-doctor.com or just google “bankruptcy doctor” to find me on the web. I can help you. Just give me call. Thanks, Attorney Mike Shovan
Michigan Bankruptcy: Who Should File Chapter 7 Bankruptcy in Michigan?
This is a short entry on who should file chapter 7 bankruptcy in Michigan and why. Chapter 7 bankruptcy is unique in couple very significant ways and I’ll highlight those differences. When we here folks use the term “Fresh Start” they are talking about filing a chapter 7 bankruptcy 9 times out of 10. The State of Michigan has seen a rise in chapter 7 filings in 2010 for obvious reasons I won’t get into here. I have a growing group of people who ask me every week, “Should I file Chapter 7 Bankruptcy”? So here are some of the facts on chapter 7. What are the Michigan Chapter 7 Bankruptcy Costs? Chapter 7 bankruptcy costs in Michigan are broken up into filing fees, educational fees and…
Is the debt canceled in a short sale treated as taxable income?
The Mortgage Forgiveness Debt Relief Act of 2007 excludes canceled debts on your personal residence from being classified as income.This special, limited exception was extended through 2012. Let’s say you negotiate a short sale on your house like this: You owe $100,000 on the loan, but the house is only worth $50,000. You find a buyer for $50,000 and the bank accepts a short sale in the amount of $50,000. Under the old law, you would receive a 1099-C for the $50,000 that was canceled and you would have to pay income tax on that amount. But now – under the new law – that $50,000 can’t be classified as income and you can’t be taxed on it.
What’s the difference between the cancellation of a debt or the discharge of that same debt in a Michigan bankruptcy?
The difference has huge tax implications. Discharged debt is not taxed as income to you – BUT canceled debt is treated as income and taxed. Let’s say that you owe $100,000 on an unsecured loan. You default after paying off $50,000 and you still owe $50,000. If your banks writes off the $50,000 balance and cancels the debt – they could send you a 1099-C and require you to claim that $50,000 canceled amount as income on your tax return. But let’s say that you file a Chapter 7 bankruptcy in Michigan. You list the $50,000 amount you owed as an unsecured obligation and it is discharged. There is no tax liability – Zero! And, if your creditor tries to nail you with a 1099-C…