Estate Planning

Do I need estate planning?
If one has assets, estate planning, through either a Will or a Living Trust, is necessary to ensure that those assets pass to one’s intended beneficiaries after one’s death. Furthermore, estate planning–through either a Power of Attorney or Living Trust–is necessary to protect oneself in the event of one’s disability. For married couples with minor children, Wills are necessary in order to appoint Guardians for those children in the event that both parents die. Finally, everyone needs a Living Will to set forth their wishes in end-of-life situations. Without a Living Will, health care professionals are left without direction as to the appropriate steps to take when a patient is comatose and unable to communicate his or her wishes. A Living Will sets forth a patient’s wishes, and, most importantly, appoints an agent to speak on behalf of the patient.

Tax Controversy

Does the IRS have to sue me like any other creditor before garnishing my wages?
The IRS is not like other creditors. They don’t have to sue you before they garnish your wages. They can also garnish certain sources of income, such as Social Security, that other creditors can’t. They can levy bank accounts, and put liens on real estate and other personal property.

Will I go to jail for not filing my tax return?
A long-standing practice of the IRS has been not to recommend criminal prosecution of individuals for failure to file tax returns, provided they voluntarily file, or make arrangements to file, before being notified they are under criminal investigation. The taxpayer must make an honest effort to file a correct return and have income from legal sources. A letter from the IRS concerning taxes is not a notice that a taxpayer is under criminal investigation.

The IRS helps to get people back into the system as part of its long-term plan to improve voluntary tax compliance. The IRS wants to get people back into the system, not prosecute ordinary people who made a mistake. However, flagrant cases involving criminal violations of tax laws will continue to be investigated.

Bankruptcy

What about Debt Settlement Companies? Will they enable me to settle my debts for pennies on the dollar?
Beware of anyone who promises to settle your debt for pennies on the dollar. Realistically, an experienced attorney can help you settle debts for 50 to 60 cents on the dollar. In a few cases, you may be able to settle your debt for less than that.

You’ve probably seen the ads on late night television: For one monthly payment you can settle your credit card debt for pennies on the dollar. While these ads make very big promises, they rarely deliver. What they don’t tell you is that they may charge you thousands of dollars upfront, and while you’re sending them payments every month, they aren’t actually settling your debts until they have received full payment for their fees. By the time you actually have paid them, your credit cards have gone to default interest rates and balances skyrocketed from late fees and accrued interest.

Can I file bankruptcy if my earnings are high?
You can file Chapter 13 bankruptcy regardless of how much money you earn.

Chapter 13 bankruptcy is a debt repayment plan that allows you to pay off your debts over a three-to-five-year period. It is a good option if you have already filed Chapter 7 within the past eight years, have too much income to file Chapter 7 bankruptcy, if you have assets that you would lose by filing Chapter 7 bankruptcy, or if you have substantial debt that would not be discharged in a Chapter 7.

Will I lose all of my assets if I file Chapter 7 bankruptcy?
While Chapter 7 is known as liquidation bankruptcy, many assets are exempt — meaning you get to keep them. You can keep your retirement plan accounts. You can also often keep your home, car and personal belongings.

Chapter 7 bankruptcy is the simplest form of bankruptcy protection. After certain exemptions, any remaining assets can be liquidated (sold) and the proceeds used to pay as much of your debt as possible. Most, if not all, of your remaining debt will be discharged by the bankruptcy court.

During our consultation, I will advise you if you have any assets that may be at risk of being liquidated. I take every step possible to ensure there are no surprises before we file a case. Before your case is filed, you will know if you qualify, which of your debts are dischargeable, and if you are at risk of losing any assets.