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RJS LAW: San Diego Tax Attorney | IRS | FTB | CPA | California

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(619) 595-1655
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(619) 777-7700
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    • Ronson J. Shamoun, ESQ., LL.M.
    • Chandara Diep, ESQ., LL.M.
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    • Brian M. Malloy, Esq.
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  • Home
  • About
    • Ronson J. Shamoun, ESQ., LL.M.
    • Chandara Diep, ESQ., LL.M.
    • Devon J. Arabo, ESQ., LL.M.
    • Brian M. Malloy, Esq.
    • Andrea Cisneros Valdez, Esq., LL.M.
    • Sam Imandoust, ESQ., LL.M
    • Lauren Suarez, ESQ., LL.M.
    • John I. Forry, Esq.
    • Martin Schainbaum, ESQ., LL.M.
    • Kaveh Imandoust, JD, MBT, CPA
    • Joseph Cole, ESQ., LL.M.
    • Christopher Engelmann, ESQ., LL.M.
    • Remy Hogan, Esq., LL.M.
    • Steve S. Mattia, Esq.
    • Dod Ghassemkhani, ESQ.
    • Vincent Renda, Esq.
    • Pedro Bernal, Esq.
    • Sabri P. Shamoun 1938-2023
    • Melanie M. Shamoun
    • Renae Arabo
    • Hilary Dargavell
    • Sandie Portilla
    • Lupita C. Torres
    • Jewell Cornejo
    • Kesia Belford
    • Danielle N. Misleh
    • Judith G. Jeremie, JD
    • Rebecca Shuman
    • Michael Lutzky, CPA
    • Gianna Iskander
  • Practices
    • Tax
      • IRS TAX MATTERS
        • IRS Appeals
          • IRS Appeals Process
          • Contesting an IRS Levy
          • Why Retain RJS LAW for IRS Appeals
          • 4 Tips For Navigating The IRS Rapid Appeals Process
        • IRS AUDITS
          • IRS Correspondence Audits
          • What are IRS Field Audits?
          • Initial IRS Compliance Center Audits
          • IRS Office Audits
          • What happens in an IRS Audit?
          • Taxpayer Rights Under IRS Publication 1
          • IRS Warns Taxpayers About Scam
        • NOTICES
          • IRS Notices
          • IRS Letters
          • FTB Notices
          • Avisos en Español
        • IRS Collections
          • Avoiding and Eliminating IRS Tax Liens
          • Collection Due Process Hearing
          • CP 501 – IRS Notice
          • Failure to file a tax return: What happens?
          • How the IRS calculates interest
          • How to get a tax levy released
          • ACS – Automated Collection System
          • IRS Collections Process
          • IRS Interest Abatement
          • IRS Revenue Officers
          • Jeopardy Assessments and Jeopardy Levies
          • National Tax Agencies
          • RJS LAW Approach to Collections
          • IRS Statute of Limitations on Collections
          • Streamlined Installment Agreements
          • Tax Penalty Abatement
          • Taxpayer Assistance Orders TAO
        • IRS Payroll Tax
          • Independent Contractor Reclassification Audits
          • IRS Forms 940 and 941
          • IRS Trust Fund Interviews
          • Payroll Tax Liability Payment Options
          • Trust Fund Recovery Penalties
        • IRS Wealth Squad
        • Offer in Compromise & Tax Settlements
          • OVERVIEW OF OFFER IN COMPROMISE PROCESS
          • The Offer in Compromise Process
          • Appealing an Offer in Compromise to the IRS
          • How does the IRS evaluate an Offer in Compromise
          • Offer in Compromise and Dissipated Assets
          • Offer in Compromise Requirements
          • Pros and Cons of an Offer in Compromise
          • Why Choose RJS LAW?
          • Offer in Compromise Alternatives
          • Actual IRS Offer in Compromise Results
      • STATE TAX MATTERS
        • EDD California Payroll Tax Lawyer
          • EDD Investigations
          • EDD Collections – Liens, Levies, and Garnishments
        • CDTFA – California Sales Tax
          • California Sales Tax Appeals
          • California Sales Tax Audits
          • California Department Of Tax And Fee Administration – CDTFA
        • California State Tax Matters – California Franchise Tax Board | FTB | EDD
          • California Residency Audits
          • Discharging State Income Taxes in Bankruptcy
          • State Tax Practice – Outside of California
      • CRIMINAL TAX ISSUES
        • Criminal Investigation Division
        • IRS Criminal Investigation Division Tactics
        • Criminal Tax Defense – Tax Crimes
        • Currency Transaction Records & Suspicious Activity Reports
        • IRS Methods of Proof: Tax Fraud and Evasion
        • Methods IRS Agents Use to Locate Assets
        • IRS Special Agent Visits
        • Are You a Criminal Investigation Target?
        • Criminal Tax Attorney vs. White Collar Defense
      • CORPORATE TAXES
      • TAX COURT LITIGATION
      • Innocent Spouse Relief
    • International Tax
    • Visa Gold Card
    • Estate Planning
    • Trust Litigation
    • Trust, Estate & Probate Litigation
    • Trust & Estate Administration
    • Probate
    • Bankruptcy
      • Bankruptcy (FAQ’s)
    • Civil Litigation
    • Criminal Defense
    • Accidents & Injury
    • Corporate & Transactional
    • Private Wealth Services
    • Real Estate Law
      • Landlord Tenant Law
    • Employment Law
  • Tax Institute
    • 10th Annual USD School of Law – RJS LAW Tax Institute
    • 9th Annual USD School of Law – RJS LAW Tax Institute
    • 8th Annual USD School of Law – RJS LAW Tax Controversy Institute – July 28th, 2023
    • 7th Annual USD School of Law – RJS LAW Tax Controversy Institute – July 15th 2022
    • 6th Annual USD School of Law – RJS LAW Tax Controversy Institute
    • 5th Annual USD School of Law – RJS LAW Tax Controversy Institute
    • 4th Annual USD School of Law – RJS LAW Tax Controversy Institute
  • Testimonials
  • Giving
    • Giving
    • RJS LAW Donates Billboard to the Girl Scouts
  • Awards
    • Awards
    • Ronson J. Shamoun at events with various dignitaries
    • SD50 Extraordinary Leadership
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    • Video Gallery
  • Blog
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Declaring Bankruptcy?

Declaring Bankruptcy


Declaring Bankruptcy

In today’s complex financial landscape, consumers face challenging decisions when it comes to managing debt. Declaring bankruptcy may provide a viable path to financial recovery. This blog post explores the signs that indicate when it might be time to consider bankruptcy, the types of bankruptcy available, and the potential impacts on a one’s financial future.

Understanding Bankruptcy: A Brief Overview
Bankruptcy is a legal process designed to help individuals or businesses eliminate or repay their debts under the protection of the bankruptcy court. It provides a fresh start for those unable to meet their financial obligations. In the United States, the two most common types of bankruptcy for individuals are Chapter 7 and Chapter 13.

Chapter 7 Bankruptcy: Also known as liquidation bankruptcy, Chapter 7 involves the sale of a debtor’s non-exempt assets to pay off creditors. It is typically suited for individuals with little to no disposable income.

Chapter 13 Bankruptcy: Known as the wage earner’s plan, Chapter 13 allows individuals with a regular income to develop a repayment plan to pay off all or part of their debts over three to five years.

Signs It Might Be Time to Consider Bankruptcy

In considering bankruptcy, it is crucial to recognize and understand your financial situation in order to make an informed decision. Here are some indicators that bankruptcy might be a viable option:

• Overwhelming Debt

If debt has reached a point where it is impossible to manage, despite your best efforts, bankruptcy may provide a practical resolution. This can include maxed-out credit cards, high medical bills, or significant loan balances you cannot possibly repay.

• Persistent Collection Efforts

When creditors are consistently calling, sending letters, or even pursuing legal action to collect debts, it is a clear sign of financial distress. If a person finds themselves dodging calls and feeling harassed by collection agencies, bankruptcy can provide relief by putting an automatic stay on collections.

• Using Credit for Essentials

Relying on credit cards to pay for basic necessities like groceries, utilities, and rent is a potential red flag. This often indicates that income is insufficient to cover essential living expenses as well as ongoing debt payments, leading to a downward spiral of financial insolvency.

• Depleting Savings to Pay Debt

If you are using retirement savings, emergency funds, or other savings accounts to keep up with debt payments, you are jeopardizing your future financial security. Bankruptcy can help preserve essential funds while addressing debt and getting you back on track for a healthier financial future.

• Facing Foreclosure or Repossession

When at risk of losing your home or vehicle due to missed payments, bankruptcy might offer a way to prevent foreclosure or repossession. Bankruptcy may be the solution to debt relief or discharge of your debts.

Evaluating Your Options: Is Bankruptcy Right for You?
Deciding to file for bankruptcy is not easy and should only be made after careful consideration of all options. While evaluating your options, please consider the following:

Assess The Financial Situation
Potential filers should take a comprehensive look at their financial situation. List all debts, assets, income, and expenses. This will help understand the full scope of the financial challenges being faced in order to determine if bankruptcy is the best course of action.

Consider Alternative Solutions
Before filing for bankruptcy, explore other options such as debt consolidation, credit counseling, or negotiating with creditors for reduced payments or settlements. These alternatives can sometimes provide relief without the long-term impact of bankruptcy on credit.

Seek Professional Advice
|Consulting with a bankruptcy attorney or a financial advisor can provide valuable insights into your situation. They can help you understand the implications of bankruptcy, the process involved, and whether bankruptcy is the best solution.

The Impact of Bankruptcy on Your Financial Future
While bankruptcy can provide immediate relief from debt, it also has long-term consequences that need to be considered:

1. Credit Score Impact

Bankruptcy will significantly affect credit scores, making it more challenging to obtain credit in the future. A Chapter7 bankruptcy remains on credit reports for 10 years, while a Chapter 13 stays for seven years.

 2. Difficulty Obtaining Credit

Post-bankruptcy, petitioners may face challenges in securing loans, credit cards, or mortgages. When they do qualify for credit, it often comes with higher interest rates and less favorable terms.

3. Emotional and Social Impact

The decision to declare bankruptcy can be emotionally taxing and may carry a social stigma. It is essential to be prepared for the psychological effects and to seek support from family, friends, or professional counselors if needed.

Conclusion: A Path to Financial Recovery – Declaring Bankruptcy

Declaring bankruptcy is a significant decision that should not be taken lightly. However, for many consumers, it offers a necessary lifeline to escape overwhelming debt and start anew. By understanding the signs that indicate the need for bankruptcy, evaluating your options, and considering the long-term impacts, you can make an informed decision that paves the way for financial recovery.

Remember, bankruptcy is not the end of the financial journey, but rather a step towards rebuilding financial stability and securing a brighter future. If you find yourself struggling with debt, do not hesitate to seek professional advice to explore the best course of action for your unique situation.

For a free consultation please contact the experienced bankruptcy attorneys at RJS LAW.  We may be reached at 619-595-1655 or via the Web at RJS LAW.

Written by Marco Torres, Esq.

Filed Under: Uncategorized

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