Reply #5: My tax lady is soon going to help me make an Offer in Compromise [View All]

The IRS will work with you if you can prove you simply can't pay them. An Offer In Compromise is when you basically offer them a much smaller amount in lieu of paying them the larger amount. Of course you have to prove it like you prove to a mortgage company when you get a loan. The IRS knows your assets and your salary and can easily verify what you pay. They really do work with you because they know when people can't pay.

Do not fear bankruptcy. When you finally have to declare it it helps you keep your basic assets like your house. You lose your credit but you also end up legally not having to pay it either. You can go to a paralegal and for $150 dollars (an amount set by law) you can find out everything you need to know and they'll help you get all the necessary paperwork together. It costs something like $299 to file bankruptcy in the courthouse and you only have to show up in court once and you get a court appointed Trustee who you don't even meet. That's when you get to face your creditors who can question you. But, nowadays people show up in droves packing the courtroom while creditors stay away. They don't even bother anymore. I did it all without a lawyer and was granted the bankruptcy. They call it 'discharging the bankruptcy'.

There are debts you have to pay even when when you declare bankruptcy. They're student loans and child support and alimony. Those don't go away when you declare bankruptcy.