Had your wages garnished? Money is withdrawn from your bank account? Bankruptcy can STOP these types of debt collection. In some cases, wage garnishments or monies taken by banks 3 months before your file can be recovered.

Even if someone has filed a lawsuit against you or has reached final money judgment, you can STOP collection. Except for cases involving fraud or breach of fiduciary trust, most civil actions can be stopped before they are filed, end lawsuits in progress and discharge money judgments permanently – all by filing bankruptcy.

How many threatening phone calls have you received from creditors today? The lawyers at Beckett Law, LLC can STOP them. Once a bankruptcy case is filed, debt collectors must STOP calling, emailing or emailing you. Our lawyers can even help STOP these calls before you file because of the Fair Debt Collections & Practices Act (FDCPA).

Connecticut utilities cannot disconnect you for nonpayment from November 1 to April 15. But what happens in May? STOP electricity, gas or water shut-off if you’ve fallen seriously behind on utility bills and can’t afford to pay, then bankruptcy may be an option. Filing for bankruptcy can discharge your past-due debt and prevent your power from being shut off. If your services are already disconnected, filing bankruptcy can guarantee your utilities are restarted!

Many of our clients come to us and want to settle their debts. Sometimes this makes sense, but sometimes it makes a bad situation worse.

Generally, if you pay a creditor less than you owe, they will send you a Form 1099C ” Cancellation of Debt form ” at the end of the year. The IRS considers this cancellation of debt as “income” and will assess income taxes on your savings. So, it might feel good this year when you settle the debt, but it won’t feel so well next year when you have to pay the piper (the IRS).

1099-C’s often take people by surprise. Don’t let that happen to you.

If you are considering settling more than ONE debt, and/or if the amounts are significant, speak to an attorney and have your financial situation analyzed before you commit.

If you do get a Form 1099-C, certainly don’t ignore it! If you do, the IRS will eventually track you down and send you a tax bill or a notice of deficiency if you didn’t include the “income” on your tax return. Interest and penalties can add up quickly in these situations.

On the other hand, sometimes we’ve seen people pay taxes on these Form 1099-C’s when they didn’t have to. There are some exceptions to the rules, one of which is when you are deemed Insolvent. If you can convince the IRS you were insolvent at the time you negotiated the settlement on your credit card (or whatever), and if you complete IRS publication # 4681, you may not have to pay any extra taxes. Call us if you have any questions.