If you already have an extremely low credit score due to years of missed payments, collection accounts and charge-offs, then bankruptcy advice is probably looking mighty good right about now. Sure, your score will likely hover somewhere around 300, out of the possible 850, and you’ll have to wait 10 years for anyone to want to give you a loan again, but it’s better than lying in bed each morning, too depressed to face the daily barrage of creditor calls and hate-mail. Bankruptcy can buy peace of mind for some debtors, but it’s not for everyone.

Bankruptcy advice has gotten more liberal over the years due to changing laws. To avoid scores of debtors flooding onto the streets with no property and nothing left to live for, the laws have changed to allow debtors to keep certain property, despite filing for bankruptcy. The debtor may keep up to $2,500 in cash, $2,400 in auto equity and unlimited 401k funds. Additionally, by law, employers cannot fire an employee who files for bankruptcy, although potential employers can choose not to hire a new employee based on that factor. Often with a filing, debtors will need to attend credit restoration and debt management courses.

When you’re seeking advice about bankruptcy, be sure to double-check what can and can’t be discharged. For instance, you’ll still have to pay off Uncle Sam if you owe taxes for the past three years. However, if you have personal income taxes over 3 years old, then you can discharge them through bankruptcy. Fiduciary taxes cannot be discharged, nor can most student loans and liens. If you owe child support or alimony, you will still have to pay up. If you don’t list debts on your bankruptcy petition, then they will not be covered. If you have debts from drunk driving or other “willful and malicious” harm, you’ll still have to pay your dues. However, there are many things that can be removed when you file for bankruptcy, such as all unsecured credit card debt, wage garnishments, utility termination, fraudulent credit claims and foreclosure.

Professional bankruptcy advice says that there are several ways to determine if bankruptcy is right for repairs to your financial situation. First of all, make a monthly budget, adding up all your expenses, such as rent/mortgage payments, utilities, food, gas or bus fare, clothing, car loans, etc. and all of your monthly income, including employer, benefits, food stamps, pensions, disability, etc. If your income is a lot less than your expenses, then bankruptcy may not help. If you suspect you may need credit cards to live even after filing, then you may need to get another job or cut expenses. If your debts are already a few years old, then you may want to just hang in there for several more years until they come off your report or you pay them.

Over the past few years, new lending options have cropped up in banks all across the country. These days equity lines, and loans have become common household staples, and consumers have new and creative ways to borrow money, finance their homes, and consolidate their debt.

While it may seem like an easy quick fix, experts warn against automatically turning to equity lines and loans as a way to reduce debt.

What is an Equity Line or Loan?  An equity line offers a line of credit based on the equity that you have in your home, with a variable interest rate. An equity loan is basically the same thing, but instead of a line of credit, the consumer is given a lump sum payment with a fixed interest rate attached. Although the interest rates on equity lines are usually lower, in a fluctuating economy, an equity loan with a slightly higher fixed rate may be the safer option.

What can you use an equity line or loan for?  Banks advertise these options as a tax deductible way to pay off debt, renovate your home, pay for school, or even make purchases at a much lower interest rate.

Anything you would use a traditional consumer loan to pay for can be done using the equity in your home. Often, equity lines and loans are promoted as a safety net to retirees, who pay higher taxes without the tax deduction a mortgage provides.

Is an equity line or loan right for me?  While equity lines and loans do offer lower interest rates, and can be a fast and easy way to pay down debt, experts warn that they should be used with extreme caution. As a consumer, you must determine if you have the discipline that is required for an equity line or loan.

Although the loan will allow you to momentarily solve your debt problems, the debt doesnt disappear. You still need to make monthly payments on your equity line. If in the meantime, you continue to overspend and rack up even more credit card debt, you may find yourself worse off than before. Now you have no equity to tap into; and if you are unable to pay your bills, your home is on the line.

When it comes to debt consolidation, it may be tempting to seek out the quick fix. Equity lines and loans are great options, but they do require hard work and discipline. Use these tools carefully, and knowledgeably, and begin today to reduce your debt.

If you have a business, or are thinking of starting one, you need to consider the legal implications of doing so. As a business owner, you are possibly subjecting yourself to more legal liability than you had before you were your own boss.

Another thing that you have to think about when you own a business is taxes. Small business taxes are handled in a different way than personal taxes, so you have to know of what is happening with your business taxes. This is a great time to consult with an accountant.

Operating your business as a sole proprietor is an option, though it is not usually the best decision. There are many liability and tax reasons why you should not operate as a sole proprietor. Seeking professional advice about these issues is recommended.

So what should the average small business owner do? Smart business owners form some sort of business entity to shield themselves personally from liability and to take advantage of business tax laws.

A common business entity, and most likely the best solution for most business owners, is to think about forming LLC. A limited liability company, or LLC can give you liability protection personally, assuming it is set up correctly and you totally separate your business and personal goings on. And with an LLC, you can can pick how you should be taxed.

Forming an LLC is very easy. The more expensive option is paying a lawyer to set up your LLC. Or, you can use a reputable online business formation companies for LLC formation. There is no reason to not form a limited liability company with prices as low as $115.

Always talk with a professional to make sure LLC formation is the right form for your business. It is vital to make sure that you have your business structure set up properly to limit personal liability and make the most of the tax benefits given to companies.

Everyone wants to know about itemized deductions.  It sounds like something for the very rich and not us commoners, but itemizing can bring benefits if you meet the qualifications to claim enough deductions.  Here is some general information about itemizing so that you can make the choice whether or not it is prudent for your tax return.

When talking about tax deductions, it’s important to know that there are actually two main kinds, standard and itemized.  A standard deduction is a specific amount of money that decreases the income you can be taxed for.  Obviously the smaller your income, the less taxes you will pay.

The amount of the standard deduction that applies to you personally is determined by your status.  The standard deduction for a single person or a married person who files separately is around five thousand dollars.  A couple who files together or someone whose mate has passed away and that has children can deduct a little over ten thousand dollars.  If you are a family head, the standard deduction that applies in your case is about seven thousand five hundred dollars.

Itemized deductions offer the benefit of converting taxable income into non-taxable income.  People who have spent enough money on items or services that qualify for deductions will find that itemizing is more profitable to them than simply claiming the standard deduction in their tax return.  There are several categories of possible itemized deductions.

I have seen many interesting commercials over the past few weeks that talk about itemized deductions.  One in particular features two guys working at a restaurant dressed in Bavarian outfits.  One tells the other how he saved money on his taxes by claiming his lederhosen.  It sounds absurd, but there is an itemized deduction for work-related expenses that are not reimbursed to the employee by their employer.  You may not wear lederhosen, but uniforms and other materials are deductible when you itemize.

Another expense, and the most frequently itemized, would be those associated with health care.  If you have long suffered from a debilitating illness or are caring for a family member who is, you are eligible for a wide array of deductions.  Some of the expenses that can be itemized include medications, therapy, treatments, and any equipment needed.  Although many feel that this money is simply lost, that doesn’t have to be the case.

To be eligible to itemize your deductions, there isn’t a specified amount of deductions that you need to meet.  A large expenditure may be enough.  Be sure to do your homework.  Each kind of item that can be deducted is governed by different rules.  If you spend enough money, though, you will be able to itemize the expense.

How can you decide whether or not to itemize your deductions?  Do the math.  Whichever option will get you the largest amount of money back will be what’s right for you.

Debt settlement is one of the simplest tools that can be used to reduce debt balances for a borrower. In essence, debt settlement means contacting a creditor or a debt elimination company and settling on a reduced loan balance. If a consumer owes $18,000 in credit card debt and has other obligations that make it impossible to make timely payments, debt settlement is a very attractive alternative to declaring bankruptcy.

For the borrower, debt settlement reduces that balance that is owed to the creditor. For the creditor, it increases the likelihood of receiving at least a portion of what is owed. There is something in it for both sides, but consumers need to be careful when pursuing settlement as a debt solution.

Debt settlement is most viable as an option when the debt has been passed on to collectors. Although it doesn’t feel like it to the consumer, the borrower is in a position of power in negotiating a debt settlement. Ultimately the creditor has to approve the deal, but the borrower is the one who could walk away from the table, drag their feet, and finally file for bankruptcy - a very costly consequence if a creditor fails to negotiate.

Many borrowers feel that attempting to settle their debts puts them at the mercy of the creditor, but this simply is not the case. The creditor is dependent solely on the borrower to receive their payment.

There are several important factors to remember if you’re considering negotiating a debt settlement. First, do your homework. There are countless companies who will make tempting promises about what they can do for you that simply won’t deliver. If it sounds too good to be true, it probably is.

Find a debt elimination company that can show a track record of successful settlements. Talk to several companies about your specific situation to weigh their recommendations against one another. Also, talk to people who have successfully negotiated debt settlements and learn from their experiences. You can save money by skipping hiring a negotiator and working on your own if you feel comfortable dealing with collectors. Keep a paper trail to make sure you can prove the details of the deal that is reached.

The downsides of debt settlement need to be understood as well. First, this can be an expensive option. Many negotiators charge an upfront fee as well as a percentage of the amount saved by the borrower in the settlement. Many programs charge fees monthly, even if no progress is being made. Second, the amount forgiven in a debt settlement is considered income and is taxable to the borrower. Once you factor in the taxes due and the fees, a borrower may not be saving nearly as much in a debt settlement as they thought. Finally, debt settlement can hurt your credit score, as paid off debt show up as “settled” rather than “paid in full.”

Getting out of debt through debt settlement is a much better option than bankruptcy. However, there are pitfalls that consumers need to understand before pursuing this strategy.