Posted by admin on September 2, 2010
Filing for bankruptcy as a small business owner can have its advantages, but it can also be complicated. If you have questions about bankruptcy, contact one of our experienced bankruptcy lawyers.
The entrepreneurial spirit is one of the great things that makes America such a great country. The willingness of individuals to step out and risk their financial stability for the sake of a business they believe in has made America what it is. However, a recent study by a major university shows that one in seven personal bankruptcies are directly related with the failure of a small business. While corporations or partnerships cannot file for bankruptcy, Chapter 7 and Chapter 13 are often used by entrepreneurs who are trying to deal with personal and business debt.
Small businesses that are unincorporated don’t have the same restrictions as larger corporations. So when a small business owner gets in over their head, the business doesn’t file for bankruptcy, rather the individual files. For small business owners who file for Chapter 7 bankruptcy there are several protections which make it an attractive choice. As a sole proprietor, you operate your business by yourself so your business debts are also your personal debts, and as such they can be dismissed in a bankruptcy case.
There are several benefits for small business owners to file for bankruptcy.
- There is uniform protection in the United States on future assets, which offers a fresh start to the debtor. If you are a business owner who files for bankruptcy, you can start a new business or a new job without worrying about having future earnings seized to pay pre-bankruptcy debt.
- Another important benefit for small business owners filing for Chapter 7 bankruptcy is exemptions. Exemptions vary from state to state and there are sometimes conditions set which debtors must surrender property. States with higher exemptions are more attractive to debtors because it protects more of their property. If you are the owner of a small business you must list all assets both business and personal, which makes the exemption value of the state an important detail to know before filing. It can make the difference between keeping a home and having it liquidated. That’s why it’s important to have an attorney to guide you. These are waters that you must not try to navigate alone.
If you are a small business owner who is seriously considering bankruptcy the place to start is to fill out the form below. When you click submit, you will be contacted by an attorney in your state who will be familiar with all the laws and get you the protection that you need. The process is complicated if you try to do it alone but with a competent attorney who specializes in bankruptcy they will help you understand your options and avoid making bad decisions. You get one chance to file bankruptcy right the first time. Start by completing the form below and click submit and you are on your way. The consultation is 100% free.
Posted by admin on August 28, 2010
Bankruptcy should be considered and planned far before the actual bankruptcy petition is filed. Once filed, bankruptcy is a relatively easy process, but to do it right requires developing a legal and financial strategy ahead of time to make sure you take full advantage of the options provided you by bankruptcy laws and bankruptcy protection.
The first thing to do is talk to a bankruptcy lawyer to get advice regarding your financial situation, homeowner issues, what property is important to you, what type of bankruptcy would be best and how to minimize the impact of bankruptcy on your financial future. If you would like to get some advice from a bankruptcy lawyer, click here to contact a few bankruptcy lawyers in your area, otherwise, read on for some basics of filing bankruptcy.
Planning to File for Bankruptcy
Before filing bankruptcy, you and your bankruptcy lawyer will have a few sessions to evaluate you financial situation. It is likely that a combination of over extension of credit, income loss and or mortgage problems have lead to an unmanageable financial situation.
Your bankruptcy attorney will take into account all of these considerations and determine the best legal strategies to protect your assets while minimizing you repayment “exposure”. Bankruptcy should be thought of as a way for the US Court to step in between you and your creditors to force them into accommodating your financial situation with regards to your ability to pay back debts that you have assumed.
You will probably want to keep a car for which you assumed debt, as well as keep you home, whether a home you’ve purchased or an place you are renting. The bankruptcy court can help you in both of these aspects. Additionally, you probably have a lot of credit card debt and personal loans that are making it impossible to keep up on monthly payments. Bankruptcy, whether chapter 7 or chapter 13, can usually eliminate these “unsecured debts” so that you can focus on the more important payments like rent, a mortgage and your car loan(s).
Once you and your lawyer have determined the best way to protect you and your family, you will need to attend the one to two hour pre-bankrutpcy counseling session. After this has ben competed, you will file your bankruptcy petition, as well as all the required financial schedules with the Court.
Filing For Bankruptcy
Once all the pre-bankruptcy planning and counseling has been completed, your attorney will prepare all the required paperwork and file the petition for bankruptcy protection with the local court of jurisdiction.
Once the bankruptcy petition is filed, an “automatic stay” goes into effect which stop all creditor collection attempts, foreclosure proceedings and any wage garnishments. This will give you and your bankruptcy attorney time discuss your situation further and figure out the best legal options to protect you and your family.
You will be required to attend at least one court hearing. During this hearing, called the 341 meeting of the creditors, representatives from all of the companies to which you owe money will attend and attempt to collect their money.
Fortunately for you, the bankruptcy court usually favors the debtor, and it will be very difficult for creditors to get anything outside of what you and your attorney have planned.
Depending on the type of bankruptcy you have filed, the bankruptcy process itself may take anywhere from two months to five years. If you have a steady income, and you file for chapter 13, you will work out a repayment plan to which you must adhere until completion.
If you do not have a steady income, you will likely file for a chapter 7 bankruptcy, and your unsecured debts will be “wiped out” and some of your property will be liquidated to generate cash to repay some debt.
There are benefits to both types of bankruptcy, and your lawyer will advise you on the best approach. Ultimately, it is your decision and eligibility based on your income that will determine which type of bankruptcy is best for you.
Please see the links below to learn more about some of the details involved with filing for bankruptcy. If you would like to get a free case evaluation from some local bankruptcy attorneys, click on the “talk to a lawyer” button.
Good Luck!
Posted by admin on August 19, 2010
Normally this post is about jobs and this one is too whether the title indicates it or not. This is about the changes in the 2011 TAX CODE and it will affect you whether you believe it or not. I did make these facts up but have documented my sources. It’s lengthy but please I beg you read it all the way through, then copy and paste it and send it to everyone you know. If you host a blog PLEASE COPY AND PASTE IT. The elections are in November and if we don’t get this repealed we will all be in trouble. – Dewey Kearney webmaster
In just six months, on January 1, 2011, the largest tax hikes in the history of America will take effect.
They will hit families and small businesses in three great waves.
On January 1, 2011, here’s what happens… (read it to the end, so you see all three waves)…
First Wave:
Expiration of 2001 and 2003 Tax Relief
In 2001 and 2003, the GOP Congress enacted several tax cuts for investors, small business owners, and families.
These will all expire on January 1, 2011.
Personal income tax rates will rise.
The top income tax rate will rise from 35 to 39.6 percent (this is also the rate at which two-thirds of small business profits are taxed).
The lowest rate will rise from 10 to 15 percent.
All the rates in between will also rise.
Itemized deductions and personal exemptions will again phase out, which has the same mathematical effect as higher marginal tax rates.
The full list of marginal rate hikes is below:
- The 10% bracket rises to an expanded 15%
- The 25% bracket rises to 28%
- The 28% bracket rises to 31%
- The 33% bracket rises to 36%
- The 35% bracket rises to 39.6%
Higher taxes on marriage and family.
The “marriage penalty” (narrower tax brackets for married couples) will return from the first dollar of income.
The child tax credit will be cut in half from $1000 to $500 per child.
The standard deduction will no longer be doubled for married couples relative to the single level.
The dependent care and adoption tax credits will be cut.
The return of the Death Tax.
Think this doesn’t affect you? Guess again!
This year only, there is no death tax. (It’s a quirk!) For those dying on or after January 1, 2011, there is a 55 percent top death tax rate on estates over $1 million. A person leaving behind two homes, a business, a retirement account, could easily pass along a death tax bill to their loved ones.
Think of the farmers who don’t make much money, but their land, which they purchased years ago with after-tax dollars, is now worth a lot of money. Their children will have to sell the farm, which may be their livelihood, just to pay the estate tax if they don’t have the cash sitting around to pay the tax.
Think about your own family’s assets. Maybe your family owns real estate, or a business that doesn’t make much money, but the building and equipment are worth $1 million. Upon their death, you can inherit the $1 million business tax free, but if they own a home, stock, cash worth $500K on top of the $1 million business, then you will owe the government $275,000 cash! That’s 55% of the value of the assets over $1 million! Do you have that kind of cash sitting around waiting to pay the estate tax?
Higher tax rates on savers and investors.
The capital gains tax will rise from 15 percent this year to 20 percent in 2011.
The dividends tax will rise from 15 percent this year to 39.6 percent in 2011.
These rates will rise another 3.8 percent in 2013.
Second Wave:
Obamacare
There are over twenty new or higher taxes in Obamacare. Several will first go into effect on January 1, 2011. They include:
The ”Medicine Cabinet Tax”
Thanks to Obamacare, Americans will no longer be able to use health savings account (HSA), flexible spending account (FSA), or health reimbursement (HRA) pre-tax dollars to purchase non-prescription, over-the-counter medicines (except insulin).
The ”Special Needs Kids Tax”
This provision of Obamacare imposes a cap on flexible spending accounts (FSAs) of $2500 (Currently, there is no federal government limit). There is one group of FSA owners for whom this new cap will be particularly cruel and onerous: parents of special needs children.
There are thousands of families with special needs children in the United States, and many of them use FSAs to pay for special needs education.
Tuition rates at one leading school that teaches special needs children in Washington , D.C. ( National Child Research Center ) can easily exceed $14,000 per year.
Under tax rules, FSA dollars can not be used to pay for this type of special needs education.
The HSA (Health Savings Account) Withdrawal Tax Hike.
This provision of Obamacare increases the additional tax on non-medical early withdrawals from an HSA from 10 to 20 percent, disadvantaging them relative to IRAs and other tax-advantaged accounts, which remain at 10 percent.
Third Wave:
The Alternative Minimum Tax (AMT) and Employer Tax Hikes
When Americans prepare to file their tax returns in January of 2011, they’ll be in for a nasty surprise-the AMT won’t be held harmless, and many tax relief provisions will have expired.
The major items include:
The AMT will ensnare over 28 million families, up from 4 million last year.
According to the left-leaning Tax Policy Center, Congress’ failure to index the AMT will lead to an explosion of AMT taxpaying families-rising from 4 million last year to 28.5 million. These families will have to calculate their tax burdens twice, and pay taxes at the higher level. The AMT was created in 1969 to ensnare a handful of taxpayers.
Small business expensing will be slashed and 50% expensing will disappear.
Small businesses can normally expense (rather than slowly-deduct, or “depreciate”) equipment purchases up to $250,000.
This will be cut all the way down to $25,000. Larger businesses can currently expense half of their purchases of equipment.
In January of 2011, all of it will have to be ”depreciated.”
Taxes will be raised on all types of businesses.
There are literally scores of tax hikes on business that will take place. The biggest is the loss of the “research and experimentation tax credit,” but there are many, many others. Combining high marginal tax rates with the loss of this tax relief will cost jobs.
Tax Benefits for Education and Teaching Reduced.
The deduction for tuition and fees will not be available.
Tax credits for education will be limited.
Teachers will no longer be able to deduct classroom expenses.
Coverdell Education Savings Accounts will be cut.
Employer-provided educational assistance is curtailed.
The student loan interest deduction will be disallowed for hundreds of thousands of families.
Charitable Contributions from IRAs no longer allowed.
Under current law, a retired person with an IRA can contribute up to $100,000 per year directly to a charity from their IRA.
This contribution also counts toward an annual “required minimum distribution.” This ability will no longer be there.
To read more: http://www.atr.org/six-months-untilbr-largest-tax-hikes-a5171#%23ixzz0sY8waPq1
And worse yet?
Now, your insurance will be INCOME on your W2′s!
One of the surprises we’ll find come next year, is what follows – - a little “surprise” that 99% of us had no idea was included in the “new and improved” healthcare legislation . . . the dupes, er, dopes, who backed this administration will be astonished!
Starting in 2011, (next year folks), your W-2 tax form sent by your employer will be increased to show the value of whatever health insurance you are given by the company. It does not matter if that’s a private concern or governmental body of some sort.
If you’re retired? So what… your gross will go up by the amount of insurance you get.
You will be required to pay taxes on a large sum of money that you have never seen. Take your tax form you just finished and see what $15,000 or $20,000 additional gross does to your tax debt. That’s what you’ll pay next year.
For many, it also puts you into a new higher bracket so it’s even worse.
This is how the government is going to buy insurance for the15% that don’t have insurance and it’s only part of the tax increases.
Not believing this??? Here is a research of the summaries…..
On page 25 of 29: TITLE IX REVENUE PROVISIONS- SUBTITLE A: REVENUE OFFSET PROVISIONS-(sec. 9001,
as modified by sec. 10901) Sec.9002 ”requires employers to include in the W-2 form of each employee the aggregate cost of applicable employer sponsored group health coverage that is excludable from the employees gross income.”
- Joan Pryde is the senior tax editor for the Kiplinger letters.
- Go to Kiplingers and read about 13 tax changes that could affect you. Number 3 is what is above.
