How long from debt collectors to attorneys?

[Anonymous]

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@masscredit wrote:

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@Anonymous wrote:

Cap 1 was first to sue me 13 months from first date of default.  I've been following your BK thread and it seems to me you are just stalling.  That's a lot of stress to live with and delaying will not help you move on with your life.  It will not go away and you've gotten some good advice.  

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In some ways I have been putting this off. Probably because I don't want to deal with all the paperwork I might have to provide. The bills aren't stressing me at all. I was on a mission to find an attorney a few months ago. I think I know which one I'll go with. Might interview a couple more. I set the time to do it after my 2021 taxes are done because that better represents my current income. And it might be more beneficial to wait after selling one of my cars. I documented where that money went in case they ask. 

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Since you are sure this is what you want to do then there is no need to put it off. The quicker you get it over with the better. Then you can start the process of the re build. You need to speak to a lawyer. You may be able to discharge the debts since you have a large loss of income instead of a chapter 13 where you have to pay a portion back. I do not know much about bankruptcy but I do know something like this is best to be overwith.

Thanks

Mark

[CosmicCash]

Good luck, it's initially a pain to file and fill out paperwork (which the attorney will help with), but once done it's much smoother sailing.  Also it may be best to hold off selling one of your vehicles until you have talked to an attorney. 

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[Steveo777]

I'm in the camp that you really need to find, retain and talk to an attorney. In the case of my wife and I, we had been sued and had judgments granted against us about two years prior to filing. These were big debts, around $350k in total. Wife is on SSI and I have a job that the creditors had not found out about. We were kind of tip toeing around, keeping very little money in the bank, etc. Looking back, this was a very stressful way of living and we were relieved to have finally gotten it together and filed. All of a sudden all the noise stopped, the phone calls, the threatening letters, notices of lawsuits, judgments...all of it. In hindsight, I would have addressed it all much sooner, had I not been concerned about creditors looking closer at the fact I had not been working when I was using cards and taking cash from them during an period of extended illness.

Everyone's circumstances are different. I would definitely seek an attorney and at least pay them something. That way you can start telling your creditors you are in the process of filing and you will have an attorney name and phone number to give them. My attorney put it like this; you can give our name and number and they can leave messages, but we probably won't call them back. It will most likely throw them off your scent for a bit of time. Remember though, collection activity will not necessarily cease with an attorney name and number, but it has to immediately cease upon filing. Good luck!!

[jmw1]

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@Steveo777 wrote:

I'm in the camp that you really need to find, retain and talk to an attorney. In the case of my wife and I, we had been sued and had judgments granted against us about two years prior to filing. These were big debts, around $350k in total. Wife is on SSI and I have a job that the creditors had not found out about. We were kind of tip toeing around, keeping very little money in the bank, etc. Looking back, this was a very stressful way of living and we were relieved to have finally gotten it together and filed. All of a sudden all the noise stopped, the phone calls, the threatening letters, notices of lawsuits, judgments...all of it. In hindsight, I would have addressed it all much sooner, had I not been concerned about creditors looking closer at the fact I had not been working when I was using cards and taking cash from them during an period of extended illness.

Everyone's circumstances are different. I would definitely seek an attorney and at least pay them something. That way you can start telling your creditors you are in the process of filing and you will have an attorney name and phone number to give them. My attorney put it like this; you can give our name and number and they can leave messages, but we probably won't call them back. It will most likely throw them off your scent for a bit of time. Remember though, collection activity will not necessarily cease with an attorney name and number, but it has to immediately cease upon filing. Good luck!!

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Your story and mine are eerily similar.  I had one judgment against me where they put a lien on the house. I didn't know about the lawsuit until after the 30 day deadline to answer had passed so service was improper.  It was an extra $2k in legal fees to get rid of the lien in bankruptcy. Another lawsuit where I didn't show up to trial and they were going to default me within a matter of days. There were six other lawsuits in varying stages. Every lawsuit I responded to cost between $200-$400 just to avoid a default. I had to respond to every interroagory and request for admissions pro se wasting a ton of free time to avoid an early default. The creditor with the judgment was getting warm on finding my employer. They filed an abstract of judgment in the correct county.  The same creditor with the judgment found my bank account, but picked the wrong day so I could exempt all of it... but it took five months to get my money back from the sheriff.

There was a ton of BK homework for me. It took two weekends to complete. It was well worth it when the phone calls, letters, and court actions stopped. It was easier for me to do the homework because I could respond to discovery on a case I knew I'd lose, or I could get much closer to the BK filing date. 

I agree that the OP needs to quit stalling and hire a lawyer and pay the required upfront retainer.  Surrendering the tax refund is OK, it's just a cost of doing business with the court and the trustee. You will get huge relief from debt in exchange for surrendering the tax refund. If you filed months ago, you would have had time to make your refund disappear but it's too late now in December. That's just one example of how procrastination costs you big money. 

[masscredit]

When it comes to taxes, I usually have to send them a check when I file so I'm not concerned with giving up a refund. That is for federal. I might get a few hundred dollars back from the state so that is no big deal. 

Something else just got added to all this. The IRS sends out an update letter in December if you owe them money. I had tax liens from years ago. Those were from a business that I closed around 2009 and life was difficult for a few years. Those liens aged off so that money isn't collectible. I guess I forgot about this one.  Probably because the IRS never filed a lien. They say I owe close to $6K for my 2011 1040. I did some research to see what the status of limitations is -

As a general rule, there is a ten year statute of limitations on IRS collections. This means that the IRS can attempt to collect your unpaid taxes for up to ten years from the date they were assessed. 

The ten-year limitations period begins to run on the date of the tax assessment. This is the date an IRS official signs the applicable form at an IRS Service Center. For example, if you do not pay in full when you file your tax return, you will receive written notice of the amount you owe, a bill. The date on this bill starts the ten year limitations period. If you did not file a tax return, the IRS can create a substitute return for you and make a deficiency assessment, which starts the ten year period. 

The ten-year collection period can end up lasting more than ten years because it can be suspended for one or more time periods. The time during which the statute of limitations is suspended is not counted toward the ten-year deadline. For example, the collections period will be suspended during time periods the IRS is legally barred from taking collection action against you. This means that the limitations period is suspended if you file for bankruptcy and the bankruptcy court issues an automatic stay preventing the IRS from taking collection action against you--the suspension lasts for the period of the bankruptcy case plus six months. The period is also suspended while the IRS is considering your request for an installment agreement, offer in compromise, or request for innocent spouse relief, or while you live outside the U.S. continuously for at least six months. The IRS can also extend the ten-year period by suing you in federal court; however, it rarely does this.

So... I have to did out the tote with my tax records from that year. I have to see when/if I filed and try to figure out the date of assessment. I would think that would be in April. If that is the case, then at this point I'm just over 9 1/2 months into it so I don't want to poke the sleeping bear. I'm going to find those taxes then speak to an attorney about it. I plan to interview one or two more after the 1st of the year. I'll then pick one and take their advice on when they think I should move forward with this. 

[masscredit]

Update - I contacted my accountant. They've been doing my taxes most years since around 2009. I had a different place my 2010 return (free) and might not have filed my 2011 taxes (they don't show them in their records). Most of 2012 was a bad period so I'm going to guess I just let it go because I had bigger things like health issues on my plate. I've been doing some research and found the assessment date is the 23C date. The 23C date is the Monday on which the recording of assessment and other adjustments are made in summary manner on Form 23C and signed by a Service Center officer. But... there might not be a statue of limitations if I didn't file. I'm wondering if I might be able to include this in my BK? 

At this point I've done all the research that I can. I have a list of a few other BK attorneys that I want to interview then I'll pick the one I feel most comfortable with. This will be something else to talk to them about during the consultation. They probably have experience with it.

Something I've noticed recently. Collection agencies are now being added as new accounts on my CRs. I've received two alerts in the last few weeks. I've also been receiving letters from attorneys who say they are trying to collect the debt. 

[despritfreya]

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@masscredit wrote:

. . .  So... I have to did out the tote with my tax records from that year. I have to see when/if I filed and try to figure out the date of assessment. . .  .  I'm going to find those taxes then speak to an attorney about it. . . I contacted my accountant. They've been doing my taxes most years since around 2009. I had a different place my 2010 return (free) and might not have filed my 2011 taxes (they don't show them in their records).

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A good attorney is not going to take your word for when returns were filed or when taxes were assessed.  Nor is he/she going to take the word of the CPA (although his/her word is typically better than the taxpayer's).  Just too risky.  A good attny is going to tell you to obtain an account transcript from the IRS for each and every year starting with the oldest year all the way up to the present.  This transcript will state exactly when the return was filed, how much is owed, when any assessments were made, etc.  You will want a similar statement from your State taxing authority if your State taxing authority provides this type of information.  Without this type of official accounting, everything is just a guess.

Edt to add:  One word of caution. . . in 99.9% of cases a SFR is not a return filed by the taxpayer.  If you are looking to discharge old taxes but did not actually file a return, you have not met the test for discharge.

Des.

[masscredit]

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@despritfreya wrote:

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@masscredit wrote:

. . .  So... I have to did out the tote with my tax records from that year. I have to see when/if I filed and try to figure out the date of assessment. . .  .  I'm going to find those taxes then speak to an attorney about it. . . I contacted my accountant. They've been doing my taxes most years since around 2009. I had a different place my 2010 return (free) and might not have filed my 2011 taxes (they don't show them in their records).

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A good attorney is not going to take your word for when returns were filed or when taxes were assessed.  Nor is he/she going to take the word of the CPA (although his/her word is typically better than the taxpayer's).  Just too risky.  A good attny is going to tell you to obtain an account transcript from the IRS for each and every year starting with the oldest year all the way up to the present.  This transcript will state exactly when the return was filed, how much is owed, when any assessments were made, etc.  You will want a similar statement from your State taxing authority if your State taxing authority provides this type of information.  Without this type of official accounting, everything is just a guess.

Edt to add:  One word of caution. . . in 99.9% of cases a SFR is not a return filed by the taxpayer.  If you are looking to discharge old taxes but did not actually file a return, you have not met the test for discharge.

Des.

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Thanks for the info! Why would they need transcripts for every year (federal and state)? I created an account on the IRS website to try to find the assessment date and see what they are showing for my 2011 return. It looks like their site only goes back 10 years. It ended with my 2012.

[despritfreya]

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@masscredit wrote:

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Thanks for the info! Why would they need transcripts for every year (federal and state)? I created an account on the IRS website to try to find the assessment date and see what they are showing for my 2011 return. It looks like their site only goes back 10 years. It ended with my 2012.

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Why?. . .  to be absolutely sure.  If Form 4506-T only allows you to go back ten years - so be it.  Fill out the form, submit it, and get the statements.  Assuming the taxing agency, either before or after you file, is unwilling to supply info needed for older years, if necessary, your attorney can subpoena additional records once the bankruptcy is filed.

Des.

[masscredit]

I'm back to having consultatons with a few more attorneys before I pick one to represent me. I find this to be the hard part. I know they aren't all created equal. I've read stories from people who had to keep calling their attorney to get an answer. Some make the process seem like it's a walk in the park. Like the one I spoke to yesterday. She told me they will open a file after I pay them. I then provide the documents that are needed. It will take a few days for them to put a case together. They file it, then there will be a hearing about 30 days later. Everything will be discharged shortly after that. I even questioned how easy she made it sound. This is an attorney that I thought highly of when I called to set up the consultation. The guy wrote a book about filing for bankruptcy. From what I read, he seems pretty good. The price reflects that. $3015 for Ch7 and $5740 for Ch13. By far the highest I've been quoted.  

I have another phone consultation tomorrow and I might do one more depending on how I feel after that call.

I mentioned my tax problem a few weeks ago (2011, possibly not filed). The attorney said I can't do anything with them unless they are filed. And in the end, I'll probably be better off dealing with the IRS seperate. I might actually owe less than they are estimating and I can set up an arrangement with them if needed. So that takes my taxes off the table.