If I'm in so much debt and my wage is already being garnished, will bankruptcy help? 21 Answers as of January 26, 2015

I am in deep trouble and need help! I'm thinking of filing for bankruptcy. My house was foreclosed in 2010 after a divorce in 2005. One creditor is currently garnishing my wages for a $20,000 debt back in 2007. Another one sends me notices of a $30,000 debt from 2007 as well. I also have not filed taxes since 2005. Where do I start, file for bankruptcy first or file my back taxes?

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Law Office of Susan G. Taylor
Law Office of Susan G. Taylor | Susan G. Taylor
You need to seek counsel to review your situation. And be prepared to become current with tax filings if not before, then soon after filing bankruptcy (within about a week). But, if you wish to discharge taxes from prior years, your bankruptcy filing will need to wait until at least 2 years after filing tax returns. Again, you need someone to review your individual debts/assets/income/goals.
Answer Applies to: Texas
Replied: 1/26/2015
Law Offices of John W. Lee, PC | Shanna Courtney Harris
It sounds like bankruptcy could be beneficial for you. However, you are required to have filed all required tax returns before filing a bankruptcy. Therefore, you should work on getting those taxes filed right away. Do not let that stop you from consulting with an attorney now about the bankruptcy, just keep in mind that getting those taxes done are a priority. The attorney will be able to better advise you is you know whether/how much tax debt you owe.
Answer Applies to: Virginia
Replied: 1/22/2015
GARCIA & GONZALES, P.C.
GARCIA & GONZALES, P.C. | Richard N. Gonzales
I would recommend filing your taxes ASAP then filing your BK.
Answer Applies to: Colorado
Replied: 1/20/2015
Janet A. Lawson Bankruptcy Attorney
Janet A. Lawson Bankruptcy Attorney | Janet Lawson
You need to see a lawyer, find one at nacba.org.
Answer Applies to: California
Replied: 1/20/2015
Tokarska Law Center
Tokarska Law Center | Kathryn U. Tokarska
Get your tax returns filed as soon as possible and consult with a bankruptcy attorney. Not filing tax returns may actually prove to be detrimental as income taxes can be discharged provided they meet certain criteria, ONE of them being that the tax returns had to have been filed more than 2 years before the bankruptcy filing. Having said that I would not wait 2 years to speak to an attorney because there may be reasons to proceed forward now with BK regardless. If your wages are being garnished and you qualify for chapter 7 discharge or if chapter 13 is a better route due to substantial non-dis-chargeable past due taxes or other issues the sooner you get your case filed the less money will be lost in garnishments and the sooner you can get out of the "mess" and work toward restoring your credit. Unfortunately I cannot say more because of missing relevant details: your current average gross monthly income, household size, living expenses, all types and amounts of debts, types and values of assets. You'll want to discuss your situation with an attorney in an interactive way.
Answer Applies to: California
Replied: 1/19/2015
    Garner Law Office
    Garner Law Office | Daniel Garner
    A bankruptcy filing will immediately stop the garnishment, and then you would need to file all the delinquent tax returns within 3 months or the IRS could object to your bankruptcy discharge. You do not have to pay any taxes owed, but you would need to get the returns filed. It is a good idea to list the IRS and the state (if you owe state income taxes) as creditors on Schedule E with an unknown liability, just so they get notice of your bankruptcy.
    Answer Applies to: Oregon
    Replied: 1/19/2015
    EDWARD P RUSSELL | EDWARD P RUSSELL
    Start by filing the tax returns going back to 2005. Any garnishments taken within the 90 days before filing a bankruptcy will be returned to you. Assuming that you will owe back taxes you can file a Ch 13 and make up fr the back taxes through the plan or make arrangements with the taxing authorities for payment.
    Answer Applies to: Minnesota
    Replied: 1/19/2015
    Stephens Gourley & Bywater | David A. Stephens
    File your bankruptcy to stop the garnishment, but you will need to file the back tax returns quickly in order to get a discharge.
    Answer Applies to: Nevada
    Replied: 1/19/2015
    A Fresh Start
    A Fresh Start | Dorothy G Bunce
    It could be that bankruptcy will help you out enormously. But when you file bankruptcy, your income records need to be in order and you will need to show that your required tax returns have been filed. So I would start by getting your returns prepared, your other financial records organized and schedule a meeting with a local bankruptcy attorney.
    Answer Applies to: Nevada
    Replied: 1/19/2015
    The Law Office of M Grater LLC
    The Law Office of M Grater LLC | Mark O. Grater
    No real yes or no answer without more but as a general rule I would file my taxes first.
    Answer Applies to: Connecticut
    Replied: 1/19/2015
    Goldsmith & Guymon
    Goldsmith & Guymon | Marjorie Guymon
    You need to file your taxes then see a bankruptcy attorney. Filing bk will stop the garnishments.
    Answer Applies to: Nevada
    Replied: 1/19/2015
    Ronald K. Nims LLC | Ronald K. Nims
    Without knowing your exact circumstances, it's difficult to advise you of whether to address the taxes or the bankruptcy first. Generally since you haven't filed taxes for 7 years, the taxes would seem to be the first priority. You need to consult an attorney who handles both bankruptcy and taxes and understands the interaction of the two.
    Answer Applies to: Ohio
    Replied: 1/19/2015
    Idaho Bankruptcy Law | Paul Ross
    You must be current on the last four years of taxes to file bankruptcy. I would recommend you file them first. Then once you have them in place, you can file the bankruptcy. Be aware that you can file the taxes after filing for bankruptcy, but the taxes must be filed usually within a month of filing the bankruptcy. No point in letting your bankruptcy failed because you did not get your taxes filed in time. That is why I recommend filing taxes first and then the bankruptcy. Plus, once you have filed you will know your liability or potential returns and plan accordingly.
    Answer Applies to: Idaho
    Replied: 1/19/2015
    Law Office of Michael Johnson
    Law Office of Michael Johnson | Michael Johnson
    Bankruptcy may be your best solution. You should contact a Bankruptcy Professional in your area to discuss your options.
    Answer Applies to: Florida
    Replied: 1/19/2015
    Danville Law Group | Scott Jordan
    You will need to get your taxes done first. Then you can file for bankruptcy.
    Answer Applies to: California
    Replied: 1/19/2015
    Rhymer Law Firm
    Rhymer Law Firm | William Rhymer
    You need to call and make an appointment for a consultation with an experienced bankruptcy attorney as soon as possible. Most attorneys will give you a free consultation.
    Answer Applies to: Georgia
    Replied: 1/19/2015
    The Law Office of Darren Aronow, PC
    The Law Office of Darren Aronow, PC | Darren Aronow
    If you are required to file tax returns but have not, then you will have to file. If you are not required to file tax returns because you have no income then you can file an affidavit in lieu of your tax returns. The chapter 7 bankruptcy will stop the garnishment immediately and get rid of those debts.
    Answer Applies to: New York
    Replied: 1/19/2015
    The Law Offices of Ryan F. Beach, PLLC
    The Law Offices of Ryan F. Beach, PLLC | Ryan Beach
    A bankruptcy will allow you to stop the garnishment. The treatment of the debt will depend on the type of debt, what type of bankruptcy you are filing (i.e. Ch. 7 or Ch. 13), and your particular situation. Most often, a bankruptcy filing would provide significant relief for someone in your situation. To determine what type of relief you would realize, you would need to sit down with an expert to discuss your situation. If you have unfilled tax returns, you must prepare them prior to filing. Filing all tax returns is not only required, but knowing what tax liabilities exist, if any, may significantly impact how you proceed in resolving your debts.
    Answer Applies to: Michigan
    Replied: 1/19/2015
    John W. Lee, P.C.
    John W. Lee, P.C. | John W. Lee
    There is not enough information here to say for certain if you should file for bankruptcy but it seems you should meet with a local, experienced bankruptcy attorney to discuss your options. Most bankruptcy attorneys will offer a free consultation to go over your situation and give you advice. In most cases, bankruptcy will stop a garnishment. I would seek the free consultation with the bankruptcy attorney before I filed my taxes even though the attorney will most likely tell you that you must file them before you file for bankruptcy.
    Answer Applies to: Virginia
    Replied: 1/19/2015
    Musilli Brennan Associates PLLC
    Musilli Brennan Associates PLLC | John F Brennan
    See an attorney now. Without details it is impossible to provide valid additional advice. If you are in or this pertains to Michigan, you are welcome to call and retain Musilli Brennan Associates with details. Good luck!
    Answer Applies to: Michigan
    Replied: 1/19/2015
    John W. Lee, PC
    John W. Lee, PC | Kim A. Lewis
    Bankruptcy will absolutely help you. Filing a bankruptcy stops all collection action, including garnishment. If you file bankruptcy before the return date on the garnishment summons you may be able to get the funds back which have been taken from your pay check. Unfortunately you cannot file bankruptcy until you have prepared and filed your tax returns for 2005 through 2013. The sooner you take care of the returns the sooner you can resolve your financial difficulties.
    Answer Applies to: Virginia
    Replied: 1/19/2015
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