Get Out Of Debt

Data are organized in table’s series by the relational database model. Every table consist its-own fields according to the data type that is stored. DBMS (Database Management-System) survived for about 2 decades just because it had flexibility. The relational database model’s purpose is providing declarative-method to specify data & queries. A user state directly the type of information the relational database model contains & the information of what type they demand for and according to that the DBMS software describes the structures of the data for the purpose of storing it & takes care of retrieval processes to answer the queries.

In relational database model a person can easily manage an endless datasets in the tables without going back & rendering data for the 2nd time.

He can even create distinct records for every data which he wants to store. The database might demand for more maintenance and design. Flat file-database is reverse of the relational database model as the former is considered to be a big table which consists of records maintained by an individual. When a person wants to include more information in that data, like updating information of a client, then in the table of flat-file-database, he will have to record all data in new record. With relational database model, a person saves more time by making numerous tables according to his wish.

Implementation of an application-environment’s relational database model is done by using tools that are available on the computers for common purpose and this is termed as relational database-management.

Relational database management supports numerous models and each model is having conceptual item’s or object’s collection, actions upon such objects & constraints below which such actions performs. The relational database model exists in coherent or lucid relational database-system that is observed as abstraction’s hierarchy. The significant roles played by the relational database model system are implementing each and every model in coherent way thereby transforming those models that are on the higher-level of concept or abstraction to the models that are on lower-level of concept or abstraction and moves in a downward direction towards machine-level.

In the relational database model, we can view a system with the help of following 4 models:

Every user’s global information model.
Sub models of data or opinions of a specific user’s class.
Data’s structural-model
Data or information distribution-model

In a data’s relational database model, relations have been considered as tuple’s unordered-sets.  A relational database model has been regarded as object’s set’s representation and the relationships in between them. These representations are always the outcome of abstraction’s processes. The relational database model serves its functions or purpose only if the model is clear, up-to-date and correct. In structural-model, the model that is 1 level beneath the relational database model in abstraction’s hierarchy, relations posses very complicated structures.

Medical bankruptcy is one of the most misunderstood terms in medical finance. There is actually no “medical bankruptcy”. That being said, medical problems have consistently been one the 3 leading causes of bankruptcy in the United States.

Although there is technically no medical bankruptcy a medical problem can certainly cause you to find yourself in bankruptcy court. Medical problems can be a double whammy; they reduce or eliminate your income and cause you to incur massive debt. In many cases you have virtually no chance of ever repaying this debt, it’s just too large. Many people find themselves in a position of losing their homes and other valuable possessions in an attempt to repay their huge medical bills.

Often, seeking the protection of bankruptcy isn’t something desirable but it’s seen as the only way out. You may think that having health insurance will provide protection against such a financial calamity, however almost 50% of all bankruptcies are caused by people facing massive amounts of medical debt even though they had medical insurance at the time of their accident or illness.

Sadly, there are also a significant percentage of medical related bankruptcies that are filed by people that aren’t really facing huge medical bills. Almost 40% of medically related bankruptcies were filed by people who owed $5,000 or less in medical bills. In many cases this is due to the medical industry being much more aggressive in collection actions than they once were. In other cases people are just not educated about how to proceed in such cases. Once the collection letters begin arriving, fear sets in, and many people just don’t look at all their options.

Yes, filing a chapter 7 bankruptcy can protect your assets and allow you to keep your primary residence if your home falls within state guidelines. These vary by state. Filing for bankruptcy protection however, is can present you with huge problems down the road and will essentially destroy your credit rating. You should carefully consider your other options before considering using bankruptcy as a shield to protect you from medical bills.

You might consider calling an attorney in your state that specializes in such matters. Your first call however should be to your creditors. The first line of defense should be making arrangements for some sort of alternate payment plan. Bankruptcy is a messy business and most creditors would rather avoid is almost as much as you would.

Chapter 13 payments are arranged through the reorganization of debt at the time when bankruptcy is filed. The debtor is required to make regular payments directly to an assigned Trustee who oversees the case. When Chapter 13 payments are received, the Trustee disperses payments to creditors until accounts are paid in full.

In some instances, Chapter 13 payments can be made through payroll deductions if approved by the bankruptcy court. Upon acceptance of the bankruptcy repayment plan, chapter 13 payments are setup to repay creditors and tax liens, if applicable.

If the debtor owns a home, filing Chapter 13 bankruptcy can halt the foreclosure process. However, if the debtor fails out of bankruptcy, the lender has the authority to initiate foreclosure proceedings. Additionally, the court may require the debtor to liquidate their assets under Chapter 7 Bankruptcy Code. If this occurs, the debtor must relinquish their property to a Trustee who will sell the assets and repay creditors.

Chapter 13 bankruptcy is available to all U.S. citizens. This chapter allows individuals to reorganize their debt and make payments over an extended period of time. However, certain eligibility requirements must be met and include outstanding unsecured debts must be less than $307,675 and secured debts must be less than $922,975. Additionally, the debtor is required to undergo credit counseling within 180 days prior to filing.

When an individual files Chapter 13 bankruptcy they must provide a certificate of credit counseling, proposed repayment plan, proof of income, detailed list of expenses, and a recent year tax return.

Collection actions against the debtor cease when the debtor files Chapter 13. However, it does not dismiss outstanding balances. As long as payments are made to the Trustee and disbursed in a timely fashion, no further action will be taken against the debtor. If the debtor is unable to make payments according to their chapter 13 agreement, the creditors can move forward with collection actions.

If circumstances arise that cause the debtor to become unable to make chapter 13 payments, the Trustee must immediately be contacted. If the financial setback is temporary, the Trustee may agree to reducing payment amounts or extending the repayment period.

In cases where financial setbacks are long-term, the court may modify chapter 13 payments, discharge the debts on the basis of hardship, convert to Chapter 7 liquidation, dismiss the Chapter 13 case, or temporarily suspend payments.

Chapter 13 bankruptcy provides individuals with the opportunity to retain their property and make a fresh start. When creating the repayment plan it’s crucial to arrange chapter 13 payments that are reasonable so the debtor can consistently make payments in a timely fashion. Otherwise the effort will be fruitless and cause the debtor to fail out of bankruptcy and lose their home, automobile and other valuable assets.

You’re in serious debt. You owe a number of creditors and have no hope of paying them. The worst part is one of your creditors is the most powerful collection agency in America…the Internal Revenue Service.

A fateful decision…You’ve decided to declare bankruptcy, and while going through your creditors you wonder if the IRS can be included. The IRS has a number of rules and restrictions on including an IRS debt in a bankruptcy. Not only that, but you’re not completely free of IRS collection actions while you’re in bankruptcy.

Let’s go through the life cycle of an IRS debt and a bankruptcy:

Can you include your IRS debt in a bankruptcy? Yes, but your debt has to meet 3 standards. If it doesn’t meet even one of them then you’ve got to figure out another way to pay the debt. The 3 standards are:

1. You can not include any tax debt that is less than 3 years old. So if your tax debt is from last year it can’t be included.

2. You can not have any unfiled tax returns.

3. You can not have any tax returns that were audited because you committed tax fraud.

One down…Let’s say that your IRS debt meets the requirements and you can include it in your bankruptcy; now what? The IRS can’t take any collection action against you while you’re in bankruptcy under the Automatic Stay of Collections.

There is a loophole for the IRS if you’re a serial bankruptcy filer. If you’ve filed bankruptcy and it had been dismissed within the last year the IRS only has to abide by the Automatic Stay for 30 days. If you’ve filed two bankruptcies then the IRS can ignore the Automatic Stay.

Do they ever quit? While the IRS can’t collect from you here’s what they can do: The IRS can perform an audit to determine your tax debt amount. The IRS can send you an annual notice stating your debt amount. The IRS can take any tax refund you would have due and apply it to your debt, or if you have a trustee handling your bankruptcy the refund goes to them to be distributed to your creditors.

An end in sight…What happens to your IRS tax debt after the bankruptcy is discharged. If your tax debt was included and discharged then the debt is non collectible. But wait; remember those 3 standards for including a debt in bankruptcy. Any tax debt that happened because of one or all of those reasons is still eligible for collections. In addition interest and penalties have accrued on that portion of the debt during the time you were in bankruptcy.

The IRS and bankruptcy do not go together, but if you know your rights you can make the decision you need about your debts and be able to get your life back on track.

Now you have the smoking gun…Use it!

Debt piled on debt… Once upon a time claiming bankruptcy was like a “get out of debt free” card. Those days are long gone, and getting a bankruptcy discharged is much harder now. But if you really want to complicate an already complicated process then try to include an IRS tax debt into your bankruptcy.

You can’t get off the hook that easy… Although an IRS debt can be included in a bankruptcy, it is very difficult. There are a number of factors that contribute to a tax debt not being able to be included. On top of that bankruptcy attorneys are not very experienced at tax law, and can easily make a mistake that won’t allow your tax debt to be considered.

Pulling back the curtain… I want to help you understand what requirements there are, and give you an alternative to dealing with your tax debt outside of bankruptcy.

So how do you get an IRS debt included in a bankruptcy, and what are some of the problems with including an IRS debt in a bankruptcy?

You can not include any years that you owe tax debt which are more recent than 3 years ago. That means if you’re filing bankruptcy in 2008, the latest year that you could claim back tax debt from would be 2005.

Even though the IRS can’t pursue any collection actions against you during the period you’re in bankruptcy the interest and penalties continue to add onto to the debt during the time it takes for the bankruptcy to be processed. And if your bankruptcy is dismissed, you’ll owe all that money to the IRS.

The time spent in bankruptcy extends the Statute of Limitations on the debt. Normally the IRS only has 10 years to collect a debt from you. But the length of time you were in bankruptcy extends that time period.

There is an alternative… What else can you do with an IRS debt if you can’t get it discharged in a bankruptcy? Since you’re filing bankruptcy you’re in a pretty desperate financial situation. This can make you a prime candidate to settle your tax debt with the IRS outside of bankruptcy.

It’s not all bad news… You may qualify for an Offer in Compromise depending on how damaged your financial situation is. With an Offer in Compromise you can negotiate with the IRS to get your debt settled for a single lesser payment. An Offer can take as long as a bankruptcy to be approved and it does have a much lower chance of succeeding; in fact only 2% of Offers are accepted. To learn more about the specifics and requirements for an Offer in Compromise read my article “Settling Your IRS Tax Debt for Pennies on the Dollar”. Also talk to your bankruptcy attorney.

Now you have the smoking gun…Use it!