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Roger, Attorney
Category: Bankruptcy Law
Satisfied Customers: 31766
Experience:  BV Rated by Martindale-Hubbell; SuperLawyer rating by Thompson-Reuters
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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. 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.

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?? keeping the 13 "open" while im filing my taxes so that when i find out my tax liability i can struture a payment plan?


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


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?


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


Through the 13?



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

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?"


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.

that will do

Roger : Great! Thanks for allowing me to assist. If you need anything further, please let me know.
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