CPA and Other Tax Professionals And How Bankruptcy May Help Your Balance Sheet
One major difference when considering debt from credit cards versus debt from private loans comes down to the fact that private student loans typically may not be discharged in filing both chapter 7 and chapter 13 bankruptcy. A ch 13 (essentially involving the repayment of some or all debts) can be utilized to create affordable repayment options for private student loans during a term of 3 to 5 years. Any private loan balance that remains subsequent to the bankruptcy receive no discharge. The balance of the student loans that is not paid during the chapter 13 survives the ch 13 bankruptcy. Ch 13 bankruptcy to deal with private student loans really does not provide an adequate solution for problems with bankruptcy. This bankruptcy option would more closely resemble a debt management option than it would a debt resolution.
Briefly, you will also want to consider that while it may seem that bankruptcy doesn’t do something for everyone (such as those whose only debt is burdensome student loans,) it certainly does do much for many homeowners who face foreclosure during brief breaks in income. Others who have faced medical disasters or who have had taxes increased without warning on a mortgage can become significantly delinquent on mortgage payments. These situations could be solved in many cases by a powerful bankruptcy defense by trained foreclosure lawyers.
CPA’s Take on State STudent Loans & Your Balance Sheet
State student loan debt originates out of state agencies. These state agencies which were created by their states are essentially government or quasi-governmental institutions. Bankruptcy may or may not be an option for these loans. Additionally, each state has a different situation regarding state student loans. Some states do not provide student loans and they generally administer these loans differently. For this reason, there is not so much of a standard defenses, typical remedy for state student loans, and bankruptcy for repayment options may or may not be an option for these loans. Some states will seek to intercept tax refunds that are state based. (This applies only in states that have state income taxes.) Specifically, you’ll find when discussing with a bankruptcy attorney from Texas that there is no state income tax and hence there would be no state income tax interception.
For those having issues with student loans, bankruptcy most likely isn’t your best option, but if you would like information, contact an attorney today to see if you can receive some sort of remedy. In addition to working with a bankruptcy lawyer to discuss options, you could also contact your CPA or find a new tax accountant to discuss your options for protecting your tax refund and other things.