This question comes up about once every six months. A client arrives at our door and wants help. They are overwhelmed with debt. Sometimes, it’s because they have this business that is not performing as they hoped/wanted/expected (often, because they need the structure and systems to make it so), other times because of an accident or a sudden illness. But, no matter what the cause, we need to work together to make the situation tenable.
For those Americans who have come upon hard times, the choice to end their problems is almost always bankruptcy. Individuals who earn about the median for their area and can’t repay their debts can file Chapter 7. Assuming there is no lying or subterfuge in the application, one’s debts can be adjudicated and the taxpayer gets a clean slate. (Clean in that they owe no money- but they no longer have access to credit cards [for a few years, at least] and their credit history will reflect the bankruptcy.) Of course, one’s assets (over a certain value) are used to satisfy [that’s a legal term, you can bet the credits are NOT satisfied not receiving all that they owe) the creditors’ demands.
Boy, was I surprised. Here I am advising all of you (but especially my clients) of all the changes that happened to affect tax filings this year. And, I missed one. A big one.
College tuition. OK. Breathe… Yes, it’s high- very high. It amazes me that the highest tuition in the land is to be found at a STATE university. When I was going to college – back before we were a free nation- you could bank on two things. State schools were cheap. State schools were easier to get into.