Bankruptcy proceedings are initiated by filing a petition for bankruptcy. When this occurs, a bankruptcy estate is created, which generally consists of all the filer’s assets. Filing under Chapter 7 or Chapter 11 of the Bankruptcy Code will generate a separate taxable entity.
There are various tax obligations depending on which type of bankruptcy is filed for. Generally, debt that is canceled or forgiven is considered taxable income for the debtor. However, debt canceled under bankruptcy proceedings is not considered income, but it will reduce the number of additional tax benefits the debtor is entitled to.
What to Expect When you File Bankruptcy
The process for filing for bankruptcy in Los Angeles is as follows:
- When your financial burden has become too much and there is no escape in sight, contact The Turoci Bankruptcy Firm to schedule a free, no-obligation consultation to discuss your situation.
- At this point, we can advise you on the right debt-relief options for your situation. While some cases are resolvable with a credit counselor, others will require the assistance of our experienced bankruptcy attorneys. When you retain our firm, we can discuss how to pay our attorney fees in the midst of having other bills unpaid. We can also formulate an easy payment plan that fits your individual needs.
- Next, our team can help you set up a meeting with a Debt Management specialist for a pre-filing counseling session.
- Our legal team can then help you develop a plan of action that meets your short-term financial needs and sets you on a course to a long-term solution. We understand that this is a challenging process, and we are committed to being available to answer all of your questions. We are here for you through every stage of the process.
- Following your bankruptcy filing, you can direct any calls from creditors to our firm. If your creditors are harassing you, we can help you fight back and uphold your rights under the Fair Credit Debtor Protection Act.
- During the final stage of your case, our Los Angeles bankruptcy lawyers can help you rebuild your credit and move on to a debt-free life.