Archive for the ‘Bankruptcy’ Category

I remember watching the comedian Sinbad when I was in college, when he had his own (short lived) show and starred in such cinematic tour de forces as “First Kid” and “Houseguest.” Turns out that the Internal Revenue Service has also had their eye on the big redheaded fool and says that he owes them back taxes in the tune of $8 million.

Sinbad, whose real name is David Adkins, is accused of stiffing Uncle Sam out of their tithe on income earned between 1998 and 2006. The entertainer has filed for bankruptcy. In the filing, Sinbad reported close to $50 million in liabilities and less than $50,000 in assets.

Like a lot of Americans nowadays, Sinbad may soon find himself out on the street. The U.S. Attorney General’s office wants to foreclose on his $1.5 million home in Hidden Hills, California to help satisfy the debt, according to federal court records.

The back taxes range from $157,934 in 2003 to $2,358,563 in 1998. Like with most delinquent tax situations, penalties and interest charges continue to accrue while things are being sorted out.

As you can see from Sinbad’s case, you do not want to mess with the IRS. The feds have the ability to hit you with charges that would make American Express blush, and your income and assets are subject to forfeiture by court order.

However, if you work with the taxman you may find him amenable to working out payment plans and reduced penalties. But you have to be proactive and let them know that you’re having payment problems. The alternative may just be hitting the ATM and learning that your paycheck has been garnished.

There are lots of ways to resolve tax debt besides burying your head in the sand and hoping for the best. There is information on IRS.gov that can help you, check it out.

Consumer bankruptcy filings are up, no big surprise when jobs are scarce and credit has dried up like the leaves accumulating on the ground right now. While always the last resort, bankruptcy may be the only way to salvage your finances. If that is indeed the case, it’s critical that you know the ins and outs of the process.

To help get you started we offer up the latest installment of Required Reading and our pick is The New Bankruptcy: Will It Work for You? by Stephen Elias. This is an updated edition of the author’s earlier version of his book. Changes were needed since significant changes in consumer bankruptcy law took effect on October 17, 2005 with passage of the Bankruptcy Abuse Prevention and Consumer Protection Act.

With these new regulations, it became for difficult for individuals to file for bankruptcy and easier for creditors to still collect debts even after filing. So having an up-to-date resource on bankruptcy to become more informed is a must.

Some of the topics covered in this guide include:

Pay special attention to the last bullet. Bankruptcy should never be approached lightly, and there are more ways than ever to get credit counseling, debt consolidation and debt relief. But when all else fails, learn as much as you can before consulting an attorney or other professional to help see you through the process.

It's no secret that money woes and marriage don't mix.  Financial stress is the number one cause of divorce, usually because the partners can't see eye-to-eye on spending and debt gets out of control for the husband or wife.

But in the current economic climate, conventional wisdom is out the door and we're seeing all manner of strange things happen.  To wit, one couple has chosen divorce as a last-ditch effort to save their relationship.

Like many Americans, Mary McCurnin and husband Ron Bednar were forced to file for bankruptcy after medical bills made them insolvent.  After repeatedly refinancing their house to pay hospital bills and living expenses, they're tapped out. To help get out from under their debt, they've filed for divorce. 

Mary is looking to get access to her first husband's Social Security payments. Her first husband, to whom she'd been married 20 years, died in 1989.  When she turns 60 later this year, Mary will be eligible for $1,200 in monthly survivor's benefits from the previous marriage but only if she is not married to Ron.

Mary and Ron say they need this money to stay afloat financially and continue to live as a couple.

It's clear that our financial system is clearly broken when two seniors can't live together legally as husband and wife and still make end meet.