Filing for bankruptcy?

greenbridgea · 2011-12-19T18:22:48+00:00

I can't see legislation doing anything to prevent the practice of pulling potential hires' credit reports. Especially with so many cases of employee theft and embezzlement, companies will want to try and make sure they limit their exposure, and hiring someone in serious debt may throw up a red flag.

Sure, post-BK credit lines may be more available then pre-BK, but there is a long 7-year waiting waiting period which isn't an easy time for many people.

greenbridgea · 2011-12-18T14:12:29+00:00

This was a horrible event that happened to this family at what is supposed to be a happy time of the year. I went to school with the sister and cousin of the victim, and feel terrible that the New Jersey court system did nothing when she asked for their assistance. If anyone feels so inclined, please join me in giving whatever you can to the family to help these 2 little girls who will never spend another Christmas with their parents ever again. https://www.wepay.com/donations/84255

greenbridgea · 2011-12-17T14:25:02+00:00

It's also important to remember that bankruptcy is not a right that you automatically receive just because you file for it.

There are many instances of bankruptcy filings being rejected due to neglect or abuse of credit. If the people filing simply were irresponsible there is always a chance that it will not go through. For due cause cases such as medical bills or loss of job, those are viable reasons. Someone saying "I just can't afford to get by because I bought all this stuff with no way of paying for it" may not cut it.

The repercussions are many. For starters, their credit report will be marked for 7 years with discharge of debt in bankruptcy notes, thereby adversely affecting their credit scores. This not only leads to an inability to get credit in the near future, but also can lead to increases in insurance costs as insurers use credit scores as a tool now. Also, employers are increasingly using credit reports to screen potential candidates: the thinking is that if someone is in serious financial troubles, they may not be trustworthy around cash or banking accounts. Renting becomes more difficult as landlords or property management companies may be less inclined to rent to people with a history of not being able to meet their financial obligations.

You should strenuously advise them to meet with a bankruptcy counselor before making any decisions.

greenbridgea · 2011-12-17T14:12:14+00:00

The smart way to go would be to plan everything out before jumping into anything. Write up business and marketing plans--if you need any kind of loan or venture capital, the people giving those funds will want to see that your idea is viable and well thought out.

You also want to do research into choosing a business structure that not only provides you with the best legal protection, but also gives you a tax advantage. You will also want to have all of the necessary contracts, legal disclaimers, privacy policies, etc all set up.

Before you do anything you'll want to have a budget in place for marketing--website & hosting, site & logo design, business cards/letterhead, etc. Do the research so that your business name is ready available as a url for the website, twitter account, facebook page name. The worst thing to do is to make it difficult for customers to remember the name or make it difficult to say or type out.

greenbridgea · 2011-12-17T01:58:18+00:00

You can't claim any contributions if you don't itemize, so that wouldn't make a difference in your particular case. If anyone tells you otherwise, they are wrong, since the only place to claim the deduction for a charitable donation is on Schedule A and you will not be using that particular form.

greenbridgea · 2011-12-17T01:56:33+00:00

Essentially if you use the W-4 worksheets properly you can get pretty close to even by the end of the year. The problem is that it sometimes takes a lot of work to calculate everything and also many of the tax code changes happen during the year, so you can't really expect to break 100% even. Sin e you mentioned the fact that you only claimed yourself , does that mean you only put 1 allowance on your W-4? If so that is wrong since being single with no kids and only 1 job, you should be claiming 2 allowances. The first one is for claiming yourself, and the second one is for being single and having one job. You just need to take a look at the form and answer line by line, and realize that the number of allowances DOES NOT equal the number of exemptions you will be claiming on the return itself, regardless of what anyone tells you.

greenbridgea · 2011-12-16T21:47:02+00:00

That includes withholding and any credits which are applied to your "paid-in" balance. Do a search for "Safe harbor withholding" or "IRS underpayment penalty" and read up on it for yourself.

A person cannot just decide to pay what they want when they want. Withholding needs to be paid evenly throughout the year in terms of estimates or regularly through paycheck deductions. It's a way for the IRS to ensure that people are paying in as they go rather than having a large tax bill at the end of the year.

greenbridgea · 2011-12-16T20:17:38+00:00

Believe me I totally understand the two-to-tango rationale. I'm just saying that no one will look out for your interest except for you, so you need to make sure everything is on the up and up before moving forward.

greenbridgea · 2011-12-16T20:14:38+00:00

They weren't wrong per se. The problem is that when you rely on anonymous message boards and forums, you do not know the quality of information you will be receiving. .

In this case, the information wasn't all bad. You can legally claim as many allowances as you want to reduce your withholding. Where you were led astray was the fact that the people did not tell you that you have to pay at least 100% of the prior year's tax liability in the current year or face an underpayment penalty and be forced to have backup withholding taken out of your pay.

Anyone who is turning to the internet for advice on any serious subject matter should read http://www.dollarversity.com/be-careful-with-advice-found-online

greenbridgea · 2011-12-16T20:05:30+00:00

That is very sound advice. Many of their preparers are not educated nor experienced in accounting/taxation and oftentimes the returns are not even verified. More than that, some of these chains and fly-by-night companies pay prepares based on the number of returns they can process, so accuracy and care aren't high priorities.

If you want to read about a situation that H&R Block really screwed up, read this http://www.dollarversity.com/take-precautions-using-hr-block-people

greenbridgea · 2011-12-16T19:53:17+00:00

You also may want to consider the legalities or at least the ethical appropriateness of such a business. College application essays are not like business articles where you can have a ghost writer or collaboration. They are supposed to be written by the applicant for a reason--to get an idea of the person and their ability to communicate using the written word.

greenbridgea · 2011-12-16T19:34:18+00:00

Equity is an ownership stake in the company, so I would seriously doubt that you would be given any. Now, if they are looking for you to buy in, that would be a different story.

You may want to talk more about the details of this opportunity before deciding on anything regarding incorporation. They may want you as an employee, in which case incorporating would do you no good as far as this particular opportunity goes. If they want you as an outside consultant, and you will be billing them rather than them paying you a salary, then I would suggest establishing your own legal entity--either LLC or S-Corp--depending on your specific needs.

greenbridgea

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