Payroll Tax Increase And Filing For Bankruptcy

It’s 2013 and what’s new? Well, your paycheck just went down thanks to the payroll tax increase that began on January 1, 2013. Specifically, the Social Security Payroll Tax Rate is now 6.2 percent which is a 2 percent increase over the 2012 rate.

What will that mean for you? To one person, it’s a minimal change in their regular, monthly cash flow. However, if you live paycheck to paycheck (like many, many people do), that change is going to have a real effect on your day-to-day life. For example, if your annual household income is $100,000, you will receive $2,000 less than you did in 2012. If you thought saving for retirement was tough last year, what do you think it’s going to be like in 2013? Did you save for retirement last year?

So, what does this have to do with filing for Bankruptcy in Colorado? First, the payroll tax increase makes filing bankruptcy a more valid option. If you were on the fence about filing for bankruptcy before, this tax increase will only help make your decision to file bankruptcy that much more reasonable. Second, if you do have to file bankruptcy in Colorado, your higher tax obligation increases your ability to qualify for Chapter 7 Bankruptcy or to possibly reduce your monthly payments in a Chapter 13 Bankruptcy.

At Wagner Law Office, PC, our goal is to take this “not-so-good” news and use it to our clients’ benefits if that’s at all possible. Call today to meet with our Colorado Bankruptcy Attorneys to find out if the filing of Chapter 7 or Chapter 13 Bankruptcy is the right solution to the certainty (yes, it’s a certainty) of your reduced income.