This is a great video explaining the “basics of bankruptcy.” 

http://www.uscourts.gov/video/bankruptcybasics/bankruptcyBasics.cfm

The video is limited in that it really only goes through the basics and cannot replace valuable guidance by an experienced attorney.

Hope you find this informative.

Recently a few of my bankruptcy clients received their 1099-C forms from creditors whose debt was discharged in bankruptcy. While outside of bankruptcy cancellation of debt could lead to tax implications, debts discharged in bankruptcy should not. However, the fastest way to deal with the problem is to file Form 982 along with your tax return and mark box 1a. http://www.irs.gov/pub/irs-pdf/f982.pdf

This same form can help people who are facing cancellation of debt “income” if they can show that they were insolvent at the time this income was incurred.

Note, I am not a tax professional and  this is not meant to substitute for competent advice by a tax professional. Further, this does not create an attorney-client relationship between the author and reader.

Rahm Emanuel, Obama’s chief of staff said, ” You never want a serious crisis to go to waste.” He explained that “it’s an opportunity to do things you would never do before.” While he was talking about our country’s current financial crisis, it could very similarly be applied to financial crisis on a personal level. When your financial troubles make you think about bankruptcy, don’t let your crisis go to waste. Bankruptcy can allow you to modify your second mortgage. It may allow you to modify your car loan or get into a more favorable loan prior to filing or it may give you a little breathing room with bills while putting away some money for a rainy day. Timing and a bit of planning may allow you to do things you could not do without this crisis. Don’t let your crisis go to waste!