I need major HELP
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| Fri, 05-01-2009 - 11:24pm |
I'm in need of some major help and I don't even know where to begin to get it.
1.) I'm underemployed. I lost my full-time job in March and am only working 10 hours per week right now. I'm looking for full-time work and am living off my meager earnings, and have one month's worth of severance pay that I haven't received yet. My bills total $1500 per month -- and that doesn't include food or gas. I'm single and live alone. I've tried to find a roommate to help with my $800 worth of monthly rent, but I haven't found one yet. I have no savings.
2.) I have, all together, about $60k worth of debt. The debt is more or less divided equally three ways -- tax debt, unsecured, and student loans. Plus there's the $5k I owe on my car. Most of the unsecured debt is medical and CC stuff that I defaulted on a few years ago after I lost my job after being hospitalized.
3.) I was sued two days before I lost my job for a defaulted credit card. The amount in question is $3200 -- the charge-off amount was $1,200. I have no lawyer because I can't afford one. I filed an answer with the court to avoid a default judgment but I highly doubt I will win my case because I don't have any valid defenses against the lawsuit.
4.) The IRS is after me. I haven't filed in a couple of years (BIG mistake) because I was being paid as an independent contractor and had no idea how to do my taxes. The place I was working for was uncooperative in getting my 1099 docs to me -- I didn't get my 2006 docs until this spring, for example. I probably owe about $15k in back taxes and I finally received a notice from the IRS about my missing tax return. I know I need to get my taxes filed, but I'm scared scared scared to even do something about it. However, I know that if I don't do anything, things will get worse.
I really, really don't know what to do right now. I am looking for a job, but as everyone knows, the job market is horrible. Before I was laid off, I'd been consulting with bankruptcy lawyers and was looking at doing a Chapter 13 plan to deal with the tax debt. I saw one BK lawyer the day after the layoff and he told me I couldn't do a 13 until I was employed full-time again. I'm really panicking and don't know what to do. I'm scared of the lawsuit going to a judgment and having that show up on my credit report, which could affect my ability to get a job. I'm HORRIFIED about the IRS crap. I can't offer the IRS anything right now, payment-wise, and my tax returns will probably require the help of a professional. (One return consists of 1099 and W-2 income, plus I lived in two states that year. UGH.) I don't know what to do or where to start. I'm not eating or sleeping properly, and I can't relax. I'm 29, so I'm too old to run home to my parents (did that before -- can't do it again), but filing for BK at this age seems like jumping the guyn. I don't know what to do.
Help! :-(

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Incarcerated for what exactly?
NO MATTER WHAT ELSE, DO NOT DO THIS....
"Go to some little CPA that does taxes on the side but knows his business IT might be even cheaper to do that. Because H&R is like 20.00 for every page they do."
While they may be cheaper, a CPA that "does taxes on the side" may or may not actually be up on the tax code and on all of you options with the IRS.
Jennifer
Have you tried writing as a freelancer through websites? I know someone here does a lot of jobs through Elance.com.
Sad, but probably true, this poor person probably does not quailify for unemploymnet.
Norma
"Patience is the best remedy for every trouble"- Plautus
I don't know much about the IRS. I live in Canada and my company was given a GST Audit. I do know government scrutinization can be very stressful! Get a hold of someone and work with them. It might take some time and yes money, but the sooner you take care of that it will be a load off your mind and you can concentrate on some of the other things you have listed.
I conversed with the government through my accountant and it cost me. I think it was worth it though because he sent in all my papers etc. They were happy with what I produced. It even showed they owed me a bit of money! I was behind since 2006 and am all caught up now to the current month. Everything is filed and paid. I am still paying the accountant and I have some debt from catching up. But I am working on it and I won't make that mistake again. I will be out of the mess next year and moving on with so much more knowledge! I can't wait, but I now see the light at the end of the tunnel. I'm going to look back on 2007-2009 and say Yeah, those were tough times, but I worked out of it and now I can do anything I want!
Hell 29 is still young. Clean it up and move on. I agree with previous posters about breaking problems into pieces. You can do this.
Thought I'd join in with some tax advice...first of all, not all H&R Block people are bad. I happen to work there during tax season. :)
I had some clients this past year with a similar situation. They had a business along with W2's and hadn't filed in 3 years. The IRS sent them a letter saying they owed almost $20,000 in taxes, interest & penalties. What we did was file the taxes and sent them into the IRS. Once the expenses for their business income was included, I got it knocked down to $3000 owed. Made a difference for them! They still didn't have the money and are trying to work out a plan with the IRS. I had them call them and tell them about their situation (laid off for almost a year) and I think the IRS will work with them right now. They (IRS) just wanted them to get the taxes filed.
So what you do need to do is go to someone that specializes in taxes (doesn't have to be H&R Block) and get those taxes filed. If you want to file them yourself, you'll need to file a schedule C (business income) along with your 1040 form. They have the forms at http://www.irs.gov . As for the other states--their websites also have their state tax forms.
You might not owe as much as you think. I think the worrying is the worst part of it. I'm sure there will be self-employment taxes (medicare & social security) owed on the income. As to how much---depends on your income after expenses. Get them done. Take in everything you paid out of pocket for your job whether it was supplies that needed to be bought, mileage driven, etc...anything you can think of.
After those are finished, send them in. If you owe any money, I say send them something--even if it's $20. They'll contact you if you don't contact them to work out a payment arrangement. As long as you're trying to work with them they will usually work with you. (At least that's my experience with them.)
As for the bankruptcy, it may get rid of most if not all of your debt. Bankruptcy does not include student loans, taxes, child support owed or other govt obligations.
Have you looked at contacting CCCS (Consumer Credit Counseling Services), they might be able to help.
Not sure if this helps or not, but I had a friend that was sued by her credit card company a few months ago. She filed something called hardship papers. She had to take her paperwork (budget, bills, etc...) to prove it, the judge filed for her because of that. She'd had a lot of medical debt and has low income as well. Doesn't help her credit, but did give her some breathing room.
Hope that helps!
Yeah, you're probably right.
Thanks again for the replies.
Just for the record, I haven't worked as a 1099 since June of last year. I've been working as a W-2 employee since then. Thus, I qualify for unemployment. I didn't file for it yet because I'm technically still working (albeit not very much) and what I make right now is about equal to what I'd be getting on unemployment. I don't see the point in filing at the moment since I'll probably need the UI benefits when the part-time gig dries up.
I finally went to my dad this weekend to get help. (Yes, the same dad who told me I was a financial f***-up. I was desperate!) To my surprise, he's helping me. He'll help me do my taxes, which will save me some money. I also saw a bankruptcy lawyer yesterday. At this point, I've seen four of them, and three out of the four recommended a Chapter 13 to get rid of the credit card debt and pay off the taxes. I can retain him for $800 and start off with a lower monthly payment ($100) to start getting the taxes paid. This would also solve my problem with the credit card lawsuit. My dad more or less said he'd help me with the retainer, which is a relief. I'm just now trying to figure out if bankruptcy is really the right thing to do. I know at some point, I'll probably have to do it, but I'm worried about finding a job when I have a bankruptcy on my record. Although having crappy credit and a possible judgment on there isn't good either, I guess.
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