House underwater? Here are some options.

Thousands if not millions of Americans have homes that are underwater, meaning they owe more than the house is worth. If refinancing is not an option and if continuing to make the mortgage payment is increasingly difficult to where foreclosure may be a reality, here are some options.

First if your bank is threatening to foreclose visit There you will find resources related to foreclosures.

If you are facing a foreclosure and you want to keep your house you generally have two options:

1) Working with your lender to modify your loan.
2) Filing a chapter bankruptcy petition.

If you are facing a foreclosure and you do not want to keep your house you generally have three options:

1) Walk away from the house, which may result in deficiency judgement that could have tax consequences.
2) Sell your house through a short sale
3) Get the lender to accept a deed-in-lieu of foreclosure
4) File a chapter 13 or 7 bankruptcy.

If you’re facing a foreclosure or anticipate getting to that point in the near future, you’re likely dealing with a lot of stress and anxiety. Don’t try to sort out your options on your own. While you may be reluctant to get help because you’re embarrassed don’t let that keep from understanding what your options are. As they say knowledge is power. If you would like to learn more about your options contact me. We’re here to serve you and to help you get back on your feet.

Torus Law, PLC
JC Cancelleri

Email JC
Phone: 804-548-4810

Are taxes dischargeable under the bankruptcy code?

The answer is it depends. Some taxes like trust fund taxes are not dischargeable. Other taxes like income taxes may be depending on various factors.

There are five factors that must be satisfied to discharge income taxes:
1) the return date for the tax must be more than three years old. For example, the return file date for 2007 taxes was April 15, 2008. To satisfy this condition a bankruptcy petition would have to be filed after April 15, 2011.
2) The return has to be filed more than two years ago; and
3) Any assessment must have occurred more than 240 days before the filing of the bankruptcy petition; and
4) The tax return must not be fraudulent; and
5) The taxpayer must not have been guilty if a willful attempt to defeat or evade the tax.

If all five conditions are satisfied then the income tax would appear to be dischargeable. For example, if you were self-employed in 2007 but didn’t pay any income taxes for that year, if you meet all five conditions as stated above you should be able to discharge those taxes by filing a chapter 7. Of course you first have to be eligible to file a chapter 7. If you are eligible filing a chapter 7 could significantly reduce your tax burden.

To learn more about Torus Law and our commitment to help you grow your business through a process of Planning, Building and Protecting please contact me.

Torus Law, PLC
JC Cancelleri

Email JC
Phone: 804-548-4810