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Pay No Tax On Discharged Debt

By Cathy Moran

discharged debt

Debt discharged in bankruptcy is tax free, even if you get a 1099 claiming otherwise. It’s unnerving when you get a 1099 after you thought the debt, and all its complications were gone. But for bankruptcy clients, the answer is simple: Debt discharged in bankruptcy is not taxable. Tax on cancelled debt The tax code […]

Filed Under: Featured, Taxes

Tax Deductions Hidden In Chapter 13

By Cathy Moran

tax deductions bankruptcy

Don’t miss the tax deductions hiding in your Chapter 13 plan payments. The same, very important debts that your Chapter 13 plan pays are often tax deductible. And you are still the person who’s paying, even if the trustee writes the check. Deductions in bankruptcy Let’s look at some common deductions lurking in the Chapter […]

Filed Under: Chapter 13, Featured, Taxes

Unfiled Tax Returns Are A Life Sentence

By Cathy Moran

unfiled tax returns yield life sentence

Unfiled tax returns upset all the normal rules about discharging taxes in bankruptcy. This story tells you why. Two clients, each with $200,000 in tax debt,  came to my office this week. One can escape it all now;  the other is facing several years before bankruptcy will do anything for him. What’s the difference? Filed […]

Filed Under: Consumer Rights, Taxes

How To Make Mortgage Lender ‘Fess Up

By Cathy Moran

What have they been doing with my mortgage payments? The client has been making a mortgage payment according to the HAMP formula for almost 18 months of her Chapter 13. Yet without a 1098 form, her very capable tax preparer told her she couldn’t deduct mortgage interest on her tax return. Never fear. We have a new […]

Filed Under: Real property & mortgages, Taxes

Avoid Paying Taxes On That 1099 Form, Legally

By Cathy Moran

IRS form 1099

It’s tax time and the mails are full of IRS form 1099. If you managed a short sale of your property; suffered a foreclosure; filed bankruptcy; or settled your debt for less than you owed, you probably got a 1099. But that’s not the end of the tax story. Receipt of the form does not […]

Filed Under: Featured, Taxes

10 Things Tax Professionals Need To Know About Bankruptcy

By Cathy Moran

Tax season approaches. Tax preparers stand a good chance of encountering clients who either have filed bankruptcy, or who may benefit from a bankruptcy filing. Here’s my list of bankruptcy nuggets that a good tax professional should have at hand. Debts discharged in bankruptcy don’t trigger cancellation of debt income– One of bankruptcy’s compelling features […]

Filed Under: Featured, Taxes Tagged With: accontants, tax preparers

Bankruptcy Busts Taxes If The Timing Is Right

By Cathy Moran

taxes dischargeable

Got unpaid taxes for 2016?  Three tax discharge timing rules control when those taxes can be wiped out in bankruptcy. On April 15, 2020 those taxes reached the end of the line as priority claims in bankruptcy.  Or, the magic date may be October 15, 2020, if you got an extension to file the return. […]

Filed Under: Consumer Rights, Taxes Tagged With: 2017, bankruptcy timing

Don’t File Bankruptcy In December

By Cathy Moran

wait to file bankruptcy

Bankruptcy can provide tax relief,  if your timing is right. Tax troubles are at the heart of so many bankruptcy filings.  It makes sense:  bankruptcy is a powerful and predictable tool to get out of tax debt. File bankruptcy before the end of the year and you fix only a part of your tax problems.  […]

Filed Under: Featured, Taxes Tagged With: 2016, discharge taxes

Tax Liens Live On After Bankruptcy, Unless….

By Cathy Moran

You mean the tax liens won’t  go away when I get a bankruptcy discharge? The client was startled that the lien would live on beyond his bankruptcy. So, if all my debt doesn’t go away, what do I get from the bankruptcy discharge?  he asked. I thought the tax debt went away when I filed. […]

Filed Under: Featured, Life after bankruptcy, Taxes, True Stories

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About The Soapbox

You've arrived at the Bankruptcy Soapbox, a resource of bankruptcy information and consumer law.

Soapbox is a companion site to Bankruptcy in Brief, where I try to be largely explanatory and even handed (Note I said "try").

Here, I allow myself to tell stories and express strong opinions on how I think law should work for the consumer and small businesses when it comes to debt.

Moran Law Group
Bankruptcy specialists for individuals and small businesses in the San Francisco Bay Area

How Bankruptcy Works

High Income Earners Pass Bankruptcy’s Means Test

ALERT:   Being above the median income on the means test is not an automatic bar to filing bankruptcy I'm so used to railing against deliberate campaigns of misinformation about bankruptcy that I forget that there's a lot of innocent ignorance out there. Start with "qualifying" for bankruptcy. A very … Read more

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