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Roger
Roger, Attorney
Category: Bankruptcy Law
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I am in the state of California. I need advice on what chapter

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I am in the state of California. I need advice on what chapter of bankruptcy i should file. Last week i went to see (2) bankruptcy attorneys and got 2 different recommendations eventhough i gave them the same information. Please assist me on this . Here is my scenario:

Single , 48 years old , 1 child living with me, Do not hold any real estate or any assets of value . Living month to month(Nothing worth $1000 or more)

The background is that the last tax return I filed was in 2003. From 2003 to 2013 i have been mostly self employed as a Real Estate Broker. From 2003-2006 i made some money but never made more than 40k a year (Gross). I owned 2 houses and did manage to live in both over the years to establish them as principle residences. From 2007-2012 i went through a difficult period in my life and struggled to make money but i still spent like i was "rich" ....As a result i lived off equity from the homes by taking out numerous hard money equity loans and living off of my credit cards that I had which was many because i had great credit. By 2009 i went through the equity and had lost the homes. From 2010-2013 i worked numerous independent contractor jobs never making more than 30 k a year max.

CURRENTLY...as of Nov 2013 i am about to take on a new business venture of which i am quite confident will explode my income. I do have control of when this opportunity starts and when i will start showing income from this new venture. As a result i am ready to clean up my life. I would like to file all of the past returns so that i am current. I also will declare BK for this fresh start. Here are the Items attached to me currently:

$120k-$150k Credit Card Debt Estimate Includes Penaltys Interest factored in/ Also 2 of the creditors filed suits and received judgments. I think they are for $25k and 15k however they are part of the amount i included.

$5000 Auto Reposession

$13,000 Eviction Judgement from a Landlord

$25,000 FTB Tax Lien for years 2004-2012 that they "estimated" i made because of my
professional license i have. They attached some checking accounts i have but i
have been really careful to never put any larger amounts in any personal accounts.

One Attorney said to file Chapter 13.....

One Attorney Said file 7 ......then file 13 if you find out you owe taxes and want a payment plan.

So my question is what Chapter of BK should i file? Any other "words of wisdom" given my particular situation?

Roger : Hi - my name is XXXXX XXXXX I'm a Bankruptcy litigation attorney. Thanks for your question. I'll be glad to assist.
Roger : The answer really depends on whether or not you want to repay these debts through a payment plan over time (chapter 13) or whether you want to rid yourself of these debts and start anew (chapter 7).
Roger : If you have a cash flow problem and need to get out from under debt, it's not likely that you could even qualify for a chapter 13 because that requires you to have steady income that can be proven to be enough to pay a repayment plan that you would enter into.
Roger : If your income is a little sporadic, chapter 13 may be a difficult option.
Roger : A chapter 7 would be more of an option if you just want a fresh start and to get away from this mountain of debt.
Roger : I see that you've gone offline, so I'm going to step away. When you return, just make a post and I'll be prompted to return.
Customer:

yes that sounds good........but because of my tax issues im trying to see whats more advantageous.......if i end up owing income taxes to the state and fed government ......does that not matter what chapter i declare??....like keeping the 13 "open" while im filing my taxes so that when i find out my tax liability i can struture a payment plan?

Customer:

Or if i owe is there a better negotiating position thats more advantageous to be in......? a completed 7? or an open 13?

Customer:

My concern is that if i file and complete the 7 i cant go on a payment plan? for back taxes? And by staying in a 13 I can?

Customer:

And is there a way to negotiate the tax debt down(if there ends up being some) and repay it?

Customer:

Through the 13?

Customer:

Thanks

Roger : Some tax debts can be dischargeable in chapter 7 or chapter 13. Here's a good link that outlines this issue: http://taxes.about.com/od/bankruptcy/qt/bankruptcy_tax.htm
Roger : If you have to pay taxes, you should be able to negotiate a repayment agreement/payment plan if you file either.
Customer:

Ok.....so your recommendation would be to go with the 7 based on my situation? So really there is no advantage or option that the 13 can provide to me given my current situation even if i end up owing state and fedral taxes?

Roger : Based on the limited information we're allowed to share here, I cannot really advise or recommend an avenue for you. However, if you want to rid yourself of your debts and then deal with the taxes that can't be discharged, a chapter 7 is likely the better choice.
Customer:


Ok got it And the 2nd part of that question?....."So really there is no advantage or option that the 13 can provide to me given my current situation even if i end up owing state and fedral taxes?"



Customer:

Thats all i need toi know

Roger : Not that I'm aware. If the taxes are not dischargeable, then you're going to have to work out a deal to repay those debts in either filing.
Customer:

that will do

Roger : Great! Thanks for allowing me to assist. If you need anything further, please let me know.
Roger and other Bankruptcy Law Specialists are ready to help you

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