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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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(949) 535-2000
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    • Ronson J. Shamoun, ESQ., LL.M.
    • Chandara Diep, ESQ., LL.M.
    • Joseph Cole, ESQ., LL.M.
    • Devon J. Arabo, ESQ., LL.M.
    • Lauren Suarez, ESQ., LL.M.
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    • Dod Ghassemkhani, ESQ.
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    • 7th Annual USD School of Law – RJS LAW Tax Controversy Institute – July 15th 2022
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WINNER OF THE UNION TRIBUNE SAN DIEGO'S BEST TAX LAW FIRM

 


8 YEARS

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  • Home
  • About
    • Ronson J. Shamoun, ESQ., LL.M.
    • Chandara Diep, ESQ., LL.M.
    • Joseph Cole, ESQ., LL.M.
    • Devon J. Arabo, ESQ., LL.M.
    • Lauren Suarez, ESQ., LL.M.
    • Daniel Huynh, Esq., LL.M.
    • Christopher Engelmann, ESQ., LL.M.
    • Leslie Miranda, Esq., LL.M.
    • Brian M. Malloy, Esq.
    • Steve S. Mattia, Esq.
    • Sam Imandoust, ESQ., LL.M
    • Kaveh Imandoust, JD, MBT, CPA
    • Andrea Cisneros Valdez, Esq., LL.M.
    • Martin Schainbaum, ESQ., LL.M.
    • Dod Ghassemkhani, ESQ.
    • Vincent Renda, Esq.
    • Pedro Bernal, Esq.
    • Melanie M. Shamoun
    • Sandie Portilla
    • Renae Arabo
    • Sabri P. Shamoun
    • Hilary Dargavell
    • Lupita C. Torres
    • Jewell Cornejo
    • Kesia Belford
    • Remy Hogan
    • Judith Jeremie
    • Marley Smith-Peters
    • Melanie Chan
    • Tanner DeMera
    • Charles Ecker
    • Anna Gurr
    • Asia Smith
  • Practices
    • ERTC – Call Us Before It’s Too Late!
    • 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
        • 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
          • 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
    • Estate Planning
    • Trust Litigation
    • Trust, Estate & Probate Litigation
    • Trust & Estate Administration
    • Probate
    • Bankruptcy
    • Civil Litigation
    • Criminal Defense
    • Accidents & Injury
    • Corporate & Transactional
    • Private Wealth Services
    • Real Estate Law
      • Landlord Tenant Law
    • Employment 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
    • Media
    • Video Gallery
  • Blog
  • Pay
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Pros and Cons of Filing for Bankruptcy

Pros and Cons of Filing for Bankruptcy

Pros and Cons of Filing for Bankruptcy

When you are researching whether or not you should file for bankruptcy, you are inundated with confusing information and jargon you are likely unfamiliar with. To help you with this process, we have compiled and condensed some information you should know about the differences between Chapter 7 and Chapter 13 bankruptcies, and the pros and cons to them both.  What are the pros and cons of filing for bankruptcy?

Chapter 7 Bankruptcy is for individuals who have little property other than necessities, and their debt is so high they can no longer keep up with basic expenses. In order to qualify for this type of bankruptcy, you must take a “means test” to determine whether or not your income is low enough to take advantage of a Chapter 7, after applicable expenses. This process is relatively quick and may only take a few months, and by law, creditors are not allowed to contact you during this time or after your debts are discharged. After the paperwork is filed and you have obtained your “automatic stay,” creditors cannot garnish your wages, institute foreclosures, or repossess autos.

Chapter 13 is for individuals who have equity in a property that they would like to keep. These individuals often have regular income, but are behind on their payments because of debts. Chapter 13 Bankruptcy allows them to maintain their property while taking 3-5 years to pay back their debt obligations through a court-approved payment plan, rather than surrendering any property.

Filing for bankruptcy is an intimidating process, but don’t be discouraged. There are many benefits to filing for bankruptcy, the main one being the forgiveness of your debts, leaving you no longer responsible for them. Filing for bankruptcy stops all collections by creditors, including foreclosures, garnishments, and repossessions. If you happen to have filed your bankruptcy with the help of an attorney, they act as a shield between you and the creditors, handling all inquiries and communication. Most states allow you to exempt necessities such as your home and car, and while it will not get rid of your student loan debt, it will prevent the lenders from taking aggressive actions to collect.

There are a few cons of filing for bankruptcy you might need to consider. First, you lose your credit cards unless you pay them off before filing, and it may affect your ability to get a new mortgage. Bankruptcy will also stay on your credit report for 10 years, and its presence may make it difficult for you to purchase a home, buy a car, obtain life insurance, and possibly get a job. It is also important to note that not all debts are forgiven through bankruptcy. These debts include student loans, alimony, child support, and back taxes going back three years. Your name will be in court records and might appear in the newspaper.

For many, the pros far outweigh the cons of bankruptcy, so they would rather file for bankruptcy and start on the road to rebuilding their lives. If you would like assistance with your bankruptcy case, contact us or call us at (619) 595-1655 and we will do our best to assist you.

______________________________________________________________________
Please keep in mind the information and advice presented in this blog is not intended to be used as formal legal advice. Contact a tax professional for personalized tax advice pertaining to your specific situation. While we try and answer all parts of the question when we write our blogs, sometimes there may be some left unanswered. If you have any questions about your problems with the IRS, SBOE, FTB, or BOE, or tax law in general, call RJS Law at (619) 595-1655.

Filed Under: Bankruptcy Tagged With: bankruptcy, bankruptcy help, Chapter 13 Bankruptcy, chapter 7 bankruptcy

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