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Tax time is rarely a happy time for anyone. Having to take a full look at your financial situation makes you feel the effects of the economy more so than ever before. By April 15th, I think we'll have a clear picture of just how hard this economy hit the families of Missouri and Illinois in 2009.
Though tax refunds are wonderful, they often only serve as temporary band-aids. If you've found yourself in debt this year, it is most likely due to an event or situation that won't be going awaylike a divorce, pay cut, layoff, or medical emergency.
People often start to feel safe again after they've used a tax refund to get caught up but, a few months down the road, these same families find themselves in just as much or more debt and without a tax refund to magically solve their financial woes.
Luckily, there is action you can take to resolve your debt that is permanent. Chapter 7 bankruptcy can eliminate your unsecured debt, stop wage garnishments and repossession and help you get back on your feet. Then, next time you get that tax refund, you can put it towards the things in your life that are truly important like your kid's college, retirement plan, or your family savings.
Not everybody finds themselves with a nice, big tax refund. In fact, many people will find that they still owe money to the governmentand being in debt to Uncle Sam is not an ideal situation. The government doesn't necessarily have to follow the same rules that creditors do. The government can do whatever it takes to get a debt repaid including levy your bank accounts, garnish your wages, and go after your other property.
So, what can you do if you suddenly find yourself in tax debt? If you have income tax debt that is 3 years old or older, you may be able to get rid of it completely under certain circumstances. If your income tax debt is within the last 3 years, you can take care of that with Chapter 13.
A Chapter 13 bankruptcy will put your taxes into a repayment plan that you can handle. More importantly, filing Chapter 13 bankruptcy stops any more interest or penalties from being added to your debt. Chapter 13 bankruptcy can also help you with other tax debts. If you are behind in your real estate taxes, it may not be long until you see your home being sold at a tax sale. After spending years building memories, raising your children, and truly turning your house into a home, the last thing you want for you and your family is to see it auctioned in 21 days.
Chapter 13 bankruptcy can protect you and your family by stopping the sale and protecting your property. These debts can also be worked into a repayment plan that will fit into your budget and ensure that you keep your home.
Problems can arise quicker than you think and come as a complete surprise. You may not even know that you are in financial trouble until you take a look at your taxes. If you discover that you are in trouble after or during tax time, look for more information about bankruptcy and how it may be able to help you.
