WHEN people are going through financial difficulty and are unable to pay their bills, their first reaction is often to ignore their debts and avoid contact with creditors. They think that by doing this, somehow the creditors will simply give up and go away. Then one day the problem blows up in their face.
Then one day they get a summons delivered to their home or work and that’s when they start to panic after learning that they’ve been sued. The next step of course is a wage garnishment, a bank account levy, a lien against their real property or any combination of the above. That’s when they rush to see a bankruptcy attorney to find out what can be done to protect themselves.
If your house is in foreclosure, it’s even worse especially if you have not made any plans for where you would be moving after the foreclosure sale. If there is a second mortgage on the property for which you may still be legally liable after you’ve lost your home, that issue needs to be addressed as well. But these issues are best addressed before the foreclosure, not after. Will there be tax consequences after a foreclosure or short sale?
The answer varies from case to case. It may be necessary to consult with a tax professional to find out if you will owe taxes to the IRS if you decide to short sell your home or let it foreclose. Can you imagine losing your home and then find out later on that you have just created another problem for yourself? Don’t rely on your realtor or anyone else for tax advice when it comes to tax or legal matters. You need to go to a professional who is qualified to give you the advice that you need.
There basically only 4 ways to get out of debt if you’re on the verge of insolvency: (1) increase income so you can start paying larger amounts on your debts to hopefully avoid filing bankruptcy, (2) reduce expenses so that you can increase your disposable income and have more money available for debt repayment, (3) Convert assets you don’t need into cash and use the money to negotiate with creditors, and (4) File bankruptcy to wipe out debts or consolidate your bills (This requires filing either a Chapter 7 or a Chapter 13).
If you’re feeling paralyzed by debt and can’t think clearly at the moment, you need a good attorney who can properly evaluate your situation and recommend possible solutions. The first thing you need to do when you don’t know what to do is to realize that sometimes, you cannot do it on your own. There is nothing wrong with getting legal help. The sooner you get help, the sooner you would be able to protect your home, your job, your car, your bank account and other assets. For more information and to schedule a free consultation, please call Toll-Free 1 (866) 477-7772. We have offices in Pasadena, Valencia and Cerritos.
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None of the information herein is intended to give legal advice for any specific situation. Atty. Ray Bulaon has successfully helped thousands of clients in getting out of debt. For a free attorney evaluation of your situation, please call Ray Bulaon Law Offices at TOLL FREE 1 (866) 477-7772.