Bankruptcy often follows a "loss spiral" as it is called. My spiral started over 15 years ago. The first round was elder care - 7 years of caring for my mom that resulted in the loss of my business. The second round was loss of housing when I lost my job in the financial crisis and had to sell my condo to avoid losing that too. The third round was a lovely marriage, until my (now-ex) husband lost his job later in the financial crisis, and we lost our house to foreclosure as I spent my savings to keep us and my 4 step-children afloat while at the same time battling breast cancer. The fouth round was being left by my husband and a 2011 divorce that cost me my health insurance before I was healthy again.
It felt like the end if the world as I knew it. I did not know what to do. Many of my efforts failed (e.g., restarting my business). I took low-level jobs while I regained my footing. I learned the hard way: I had to recover first physically, then socially and emotionally, before I could truly function at my prior level. And I had to do so with a poverty-level income, no health care, no family and insecure housing.
I truly started to recover when I moved to Arlington, VA in 2014 and started over in a new town. My church, St George's Episcopal Church, has been my rock. I became involved in the community. I also read the work of many healers (and studied with some via Facebook); some have become friends. It was only in late 2016 that started to I felt functional again.
Though you may have known someone with a story like mine through your workplace, your spiritual community, or through Facebook, it's difficult to fully understand until it is you, trying to keep up a normal exterior while navigating the slow, painful and halting recovery from personal disaster. It's opened my eyes and changed me forever.
Fast-forward to 2015: Through a friend, I was hired into a tech company, first part-time, which grew to full-time. In 2016 I rose above the poverty level for the first time since my divorce. My modest salary caught the attention of the IRS who in August 2017 filed a tax lein for a 2007 return. There is a Paychex and IRS computer error involved, a prior tax attorney whose fee became unaffordable, and now a statute of limitations that has passed and it cannot be undone. The amount has ballooned to six figures.
The lien has left me with $718/month in income, less than my rent. Through my company's Legal Shield plan, I have a referral (and a 25% discount!) to a good small tax firm. Both the tax and bankruptcy partner have advised me to file for bankruptcy. They believe that the errant tax bill actually can be discharged in bankruptcy for technical reasons.
I've quickly had to get over my shame -- get over myself, you might say. Filing bankruptcy would immediatly suspend the lein and restore my normal salary. Without that relief, I could well become homeless (I estimate November 1 as the high-risk date). Even if we lose in bankruptcy court, I will have representation to negotiate a lower payment with the IRS.
Bankruptcy has costs associated with it. And a deadline - September 20 is when I need funds for the attorney so that I can file and receive at least one full paycheck in October and thereby pay my November rent.
I have emptied my year's worth of 401(K) savings to pay the attorneys. My net proceeds were $912 after (wait for it) 20% IRS withholding.
I need $3660.50 to make my world functional again:
$3000 - bankruptcy attorney discounted flat fee (Legal Shield)
$335 - filing fee for Alexandria Federal Court
$787.50 - 3 hours tax attorney at discounted hourly rate of $262.50 (Legal Shield)
$450 - 10 hours accountant @ $45/hour
TOTAL COST: $4572.50
My 401K WITHDRAWL: $912.00
WHAT I NEED: $3660.50
gofundme says to add: How else can you help? Once I have completed my part of the bankruptcy filing, I will be seeking freelance work as a "side hustle," as there will no doubt be further expenses. If you are willing to have a conversation with me about that, I would be most grateful.
However, filing the bankruptcy petition is the most important act because it suspends the lien of $624 every two weeks (2/3 of my pay), stabilizes my income and eliminates the risk of homelessness.
I need to come up with at least $2423 by September 20 in order to file. Even a $50 gift will take 49 people to reach that amount. So the other thing you can do to help is share my situation with our mutual friends and acquaintances.
Also, note that any gift you give for a bankruptcy filing is taxable income to me and I must disclose it in the filing. It cannot be a loan or have any strings attached. I can't offer anything in return except my heartfelt gratitude.
Out of all of my losses, I have slowly found a calling in countering the dangerous political environment that has emerged in this country. I feel it at church, at work, in my community, through my work this summer community organizing and in the 2017 Virginia elections.
I am feeling my prior skills start to come into formation, coherently, in a role that may involve digital communications, copywriting, fund raising, speechwriting, leadership or all of the above. I have no idea where this will lead. The form it takes depends in part on the resolution of this IRS stiuation.
I am forever grateful to the many people who have helped me to heal over the past several years, those who know they have helped and those who have no idea. I hope that I will be free of this IRS Sword of Damocles and can go all-in for the rest of my life. If bankruptcy is what it takes, that is what I will do -- with your help.
Thank you from the bottom of my heart, not to mention the pit of my stomach. ;-)
- Theresa Reed
- Pritha RaySircar
- Hiro Boga
- Suzan Bartels
Organizer and beneficiary
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