What is an IRS Form 1099c?

A debt that is forgiven to you on your Bucks County residence is considered as income to you. Your mortgage company reports the forgiveness to the IRS which will then send you a form 1099c with the amount of the forgiveness which is subject to federal tax.  Different states have different standards as to whether or not the forgiveness is considered as state income.  In any event, you may have to pay taxes on this amount unless you qualify under the Mortgage Forgiveness Debt Relief Act passed in 2007.

In addition, if an individual enters into a debt forgiveness or consolidation with a company, they are likely to receive a 1099c at the end of the year if the company reduces their debt.  I have written about my disdain for "debt settlement" companies before, and the 1099c "surprise" many of their users receive is another reason I still detest them.  Rarely do they reveal, or only in fine print, that if the company is able to negotiate a debt (which they rarely do), you get stuck with taxes due at the end of the year.  

What are credit rating bureaus and what do they mean for Bucks County bankruptcies?

Credit bureaus gather information on Bucks County debtors provided by lenders you deal with and compile it into a report . Frequently, Bucks County bankruptcy clients already have unfavorable credit scores.  I often tout the benefits of a Bucks County bankruptcy and how they normally overshadow a potential "hit" to one's currently low credit score.  

A numerical credit score is assigned to your report which reflects your likelihood of repaying your debts.  The most used credit score is the FICO score;  ratings range from 300 to 850. The higher your score, the better your rating and chance to be approved for the loan or product you are seeking. The FICO score is a proprietary number, and each credit bureau guards the algorithm behind what goes into a credit score.  

There are three major credit bureaus: TransUnion, Experian and Equifax.  You are entitled to receive a free credit report annually from each of these bureaus.  

Here are the phone numbers for you to call but remember that to get your FICO score, there is a fee:

TransUnion: 800-888-4213

Experian: 888-397-3742

Equifax: 800-685-111

Life After a Bucks County Bankruptcy: What is an Emergency Fund?

After people go through a Bucks County bankruptcy and have their debts discharged, they frequently ask how to get back on solid financial ground and avoid bankruptcy again.

Most financial counselors and Bucks County bankruptcy lawyers recommend that you have a fund set aside for unanticipated expenses or unanticipated events that will prevent you from making your usual salary. This goal is normally called an "Emergency Fund".

Your goal should be to have the equivalent of six months salary set aside to be used only in extreme situations. What would you do if you suddenly lost your job or your child became seriously ill and you find yourself with huge medical bills? Even more simply, what if the hot water heater in your home goes in the middle of winter?

Use some discipline and set aside a few dollars from each paycheck until you have six months worth of salary. You can arrange to have your bank direct deposit the money and you won’t even miss it. I personally use Smarty Pig to create my emergency and savings funds. It provides a nice interface and tracking tools. When asked, I always tell my internet savvy Chapter 7 and Chapter 13 Bucks County clients to set up an account with Smarty Pig.

Here is the key: Don’t even think about using that money unless it is absolutely necessary!

How Long Does a Bucks County Bankruptcy Take?

The length of time in a Bucks County bankruptcy is contingent upon whether the debtor is filing for Chapter 7 or Chapter 13.

A Chapter 7, once filed, is usually discharged within four to five months while a Chapter 13 can take anywhere from three to five years.

In a Chapter 13 there is an agreed upon repayment plan of debt whereas in a Chapter 7 debts are liquidated. Always consult with a bankruptcy attorney as deciding which type of bankruptcy to file can be confusing. It can also be extremely complicated if you attempt to file by yourself and you will definitely be entering into uncharted waters.

What Are the Debt Limits in a Chapter 7 and Chapter 13 Filing?

Can you have unlimited debt if you file a Bucks County bankruptcy? It depends on the type of bankruptcy, either Chapter 7 or Chapter 13.

In a bizarre twist, there are no debt limits in a Chapter 7 filing but there are limits for a Chapter 13. The current limits for a Chapter 13 filing are $360,475.00 for unsecured debt and $1,081,400 for secured debt. Under the current bankruptcy code these amounts are adjusted every three years and is based on the consumer price index for all urban consumers. The next scheduled adjustment is April 1, 2013.

Thus, if you are a former millionaire who has millions of dollars in debt and pass the means test, you may qualify for a Chapter 7. If, however, you are that same millionaire and you are slightly above the median income for your household size (which would put you into a Chapter 13), you cannot file due to the debt limit, thus precluding you from the benefits of a bankruptcy in Bucks County.

Of course, whichever chapter of bankruptcy you file for in Bucks County, there are still many debts that cannot be discharged.

What is Adequate Assurance in a Chapter 7 and 13 Filing?

One of the biggest concerns of Bucks County debtors is what happens to their utility services if he/she fell behind in payment prior to filing for bankruptcy. Do not be alarmed!

Section 366 of the Federal Bankruptcy Code provides the debtor with continuance of service providing “adequate assurance” for future service is given within twenty days of filing a Bucks County Chapter 7 or a Chapter 13. The assurance can be a cash deposit, letter of credit, certificate of deposit or some other security agreed upon by debtor, utility company and trustee. Generally, the utility company requests a reasonable monetary amount.

In many communities, like in Bucks County, it often happens that there are a limited number of utility providers so it would be difficult for a debtor to find another company to serve his/her needs. The "adequate assurance" provision provides the debtor with some level of security knowing that, going forward, his electric , phone or gas, will not be turned off.

Of course, the the Bucks County debtor must continue to make regular payments in order for the assurance to remain in effect.

PA Foreclosure Abuse Settlement

After years of struggling with foreclosure abuses in Bucks County, a multi-state settlement of $25 billion has been reached. The settlement affects approximately 750,000 individuals. As ABC News Reports,

Payments of about $2,000 will be made to about three-quarters of a million households that were foreclosed on through abusive practices, distributed over three years.

A foreclosure in Bucks County can be a stressful event, where a Bucks County resident faces losing their home due to unpaid mortgage or taxes. They were faced with a decision on whether they should file for bankruptcy. Many families and individuals, as a result of the abusive practices of the mortgages companies, had to file a Chapter 13 in Bucks County. The settlement will bring $226 million to the Commonwealth of Pennsylvania.

As many know, a Bucks County bankruptcy lawyer can stop a foreclosure and a sheriff sale. Through bankruptcy, the arrears of a mortgage can be paid through a five year plan. It is sometimes the best path available for people to save their home and get a fresh start.