Gather Important Documents
Do you struggle to pay your monthly bills in full? If yes, it’s crucial to take proactive steps to regain financial stability. One of the foundational steps in this process is ensuring you have access to essential personal documents, such as your Social Security card and recent tax returns.
Locate your Social Security card. It is often required for employment verification, opening bank accounts, and accessing various government services. Accessing your federal tax transcripts can provide valuable insights into your financial history and assist in budgeting or applying for assistance programs. In addition to federal tax returns, obtaining your state tax returns is essential.
For a Social Security replacement card, the Social Security Administration (SSA) offers multiple methods. You can go online, in-Person or by Mail Application. Once your application is processed the SSA typically mails your new card within 10 to 14 business days.
For federal tax transcripts go online to irs.gov and create an account, navigate to “Tax Records” section and select “Get Transcript Online.” For state tax returns contact the California Franchise Tax Board or your tax professional to access these documents.
Having these documents readily available will aid in assessing your financial situation, applying for assistance programs, and creating a plan to regain financial stability.
Next, visit your county recorder’s office, this is a crucial step in identifying any tax or judgment liens that may be filed against you or your property. Identifying existing liens is essential for several reasons. Liens can negatively affect your credit score and borrowing capacity. Liens may complicate or delay the sale or refinancing of your property. Unresolved liens can lead to legal actions, including foreclosure. By proactively searching for and addressing any liens, you can take informed steps toward financial stability and protect your property interests.
Got tax liens? Dealing with a tax lien, whether IRS or a state agency like the California Franchise Tax Board (FTB) requires prompt action to avoid serious financial consequences. Tax liens can attach to your real estate, personal property, and financial assets (bank accounts, receivables, etc.). Liens can damage your credit, complicate property sales, and eventually lead to enforced collection like a levy or seizure.
Got Judgment Creditors? Judgment creditors collect through liens, wage garnishments and bank levies. A bank levy is a legal tool that allows a judgment creditor to freeze and seize funds from your bank account to collect on a court judgment. To protect your income from potential bank levies, you may consider stopping direct deposit or withdrawing your funds immediately after they’re deposited. Once your funds are frozen you have a short window of time to object. If the funds are exempt (i.e., Social Security, disability or are needed for basic living) you may file a claim of exemption with supporting financial statements. If you fail to object or the court denies your exemption then the funds are released to the creditor.
Withdrawing the funds makes sense, if you are aware a creditor may act soon, withdrawing the money immediately after a direct deposit may help you retain control of your funds before a freeze. Exempt income like social security, disability, unemployment or child support, if mixed with other funds, can still be frozen. Withdrawing these funds quickly and keeping good records can help assert your rights. Also, if you need the money for rent, food, or medical care, acting quickly may be necessary to avoid disruption while you seek legal protections.
If you cannot pay your monthly bills in full, you are on a financial slippery slope. The right advice can help you regain control and get back to solid ground. Whatever your situation, a qualified professional can help you in managing your debts, protecting your assets, and dealing with your creditors effectively.The foregoing is not legal advice. Consult a qualified Bankruptcy and Tax Relief attorney for guidance. Catherine Christiansen, Attorney, is an experienced local attorney in Bankruptcy & Tax Relief. She can be reached at christiansenlaw@icloud.com and 562-608-8368.