Why Chapter 11 Bankruptcy can be better than a Chapter 7 Bankruptcy

In a Chapter 11 Bankruptcy you are in charge of selling assets and paying creditors.   If you have significant assets to be sold you can make sure that you get the best price for these assets, and you can also negotiate with your creditors to settle these debts at the lowest price.   In a Chapter 7 Bankruptcy a Trustee is appointed who makes all decisions regarding what to sell and at what price.   He is not concerned with your interests, rather he cares about the interests of your creditors.   Additionally, the Trustee charges fees for all of the time he spends selling your assets and paying creditors, which fees are often a considerable portion of the assets.

Individuals can file for Chapter 11 Bankruptcy protection, and the advantages can be considerable, because you do not have to pay a Chapter 7 Trustee his hourly rate.  In other words, in a Chapter 11 you can be your own trustee, pay a lawyer who works for you, and have control over the liquidation process.  In a Chapter 7 a trustee is appointed who is paid from your assets, and you have no control over the liquidation process.

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Offer in Compromise or Installment Plan

When you have past due federal income taxes and wish to resolve this issue, you need professional advice regarding your payment options.   To set up either an offer and compromise or a payment plan the IRS will want financial information regarding your income and assets to determine what the IRS believes they can reasonably collect.  If the amount is not too high and you a can satisfy the debt quickly then a payment plan is a good option.   If you owe a lot of money and the amount you can afford to send will not pay the debt quickly, I would recommend making an Offer in Compromise.

In an Offer in Compromise you can either pay a lump sum or over time.  If you enter an installment agreement interest continues to add up and you may not ever pay off the IRS debt.   An Offer in Compromise may be a better deal since you will have an end date for your payments.  If you intend to file bankruptcy to discharge the IRS debt, it may be in your best interests to make a payment arrangements until such time as you can file bankruptcy to discharge the debt.

You most likely will need professional advice to figure out the best choice to make to resolve your IRS problem.

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Child Support in Georgia

Georgia has child support guidelines to determine the amount of child support to be paid.   The guidelines are extremely complicated and include many factors, which a good attorney can help advocate for you.  The first factor is the amount of gross income each parent earns.   Typically this includes overtime income.  If a spouse does not work, the Court can impute income to that spouse.  A court can also impute income to someone who has the ability to earn more money.   The income of a self employed person can be hard to prove, as a self employed person may deduct (legitimately and otherwise) many expenses which lower their gross income.

Once the gross income is determined, then a determination is made regarding the relative income of each parent as a unit.  For example, if each parent earns $3,000.00 a month, then the family income would be $6,000.00 and each parent would earn 50 percent of the income.  If one parent earned $4,000.00 a month and the other parent earned $2,000.00 a month, the family would still have a gross income of $6,000.00, but the first parent would earn 66 percent of the income and the other parent 33 percent.

This is important as a support obligation is determined according to this ratio.   A family with two (2) children that earns $6,000.00 would be determined to spend $1,384.00 in caring for this children.  The parent earning $4,000.00 would be presumed to pay 66 percent of this, or $922.71, and would pay 66 66 percent of medical insurance and 66 percent of daycare costs.

There are many other factors the Court uses in determining child support.   Having a good lawyer to help you with this issue can make sure a fair amount of child support is determined.

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Offer in Compromise

The IRS has a program to settle past due IRS debts which is called an Offer in Compromise.  The IRS has 10 years to collect on past due debts, and will get very serious about collection when it gets close to the ten year mark.  In this bad economy, many people with failing businesses use their money to keep a business running instead of paying their taxes.   When the business fails, the individual is left without income but still owes the taxes.

Beware of companies alleging "Pennies on the Dollar" settlements as if this is a foregone conclusion.  The IRS Offer in Compromise program is essentially very simple in concept.   The offer should equal the assets of the taxpayer plus 48 months of disposable income as derived by IRS guidelines for a lump sum payment.   By disposable income I mean your income less living expenses as defined by the IRS.   For example, if you now earn $50,000.00 a year as a family of four, based on the IRS guidelines you may only have $100.00 a month to pay towards the debt.   An acceptable offer would then be $4,800.00 plus the value of assets.  You have 5 months to pay this amount.

 I am also a bankruptcy attorney, so I can advise you of your options in that regard.  For example, it may be in your best interest to set up a payment plan for a period of time and then file bankruptcy.

I am a local attorney who not part of a large mill organization, and I may be able to help you with your IRS problems.

Visit my website at: tomtierneylaw.com