Hatfield Harris, PLLC Hatfield Harris, PLLC 2026-08-18T18:44:54Z https://www.hatfieldharris.com/feed/atom/ WordPress /wp-content/uploads/sites/1303181/2020/03/cropped-HH_SITEICON_512x512_MAR20-32x32.jpg On Behalf of Hatfield Harris, PLLC <![CDATA[What happens if you ignore a civil lawsuit?]]> https://www.hatfieldharris.com/?p=69212 2026-08-18T18:44:54Z 2026-08-07T14:06:21Z What it means to ignore a lawsuit Disregarding a lawsuit often involves failing to take a required action after receiving a summons and complaint. An answer is typically a written response that admits, denies or states that you lack enough information to address the allegations. Instead of responding immediately, a defendant may file a qualifying motion that challenges a legal defect in the complaint. In Arkansas, you generally must file a written answer or qualifying motion within 30 days after formal service, not counting the day you received the summons. Failure to act within the procedural deadline may result in a default judgment. If you believe service was defective, ignoring the papers remains risky because a court may disagree. You generally must raise improper service in a motion or responsive pleading.

What may cause a default judgment?

The plaintiff may seek a default judgment if you fail to answer or otherwise defend the case. The court may then establish liability without hearing your account, although the plaintiff may need to prove the amount of damages. Several failures can give the plaintiff grounds to seek a default judgment. Common reasons include:
  • Missing the deadline to answer
  • Failing to file a qualifying motion
  • Submitting a document that does not meet court requirements
Calling the plaintiff, discussing a private settlement or sending a letter you never filed with the court may not count as a formal appearance or responsive filing. The court generally looks to its record when deciding if you responded.

What you may lose by staying silent

When you do not participate, the judge might never hear facts that could support your position. Your absence can limit several important rights and opportunities.

Your available defenses can be unheard

Your answer can identify legal or factual reasons why the plaintiff cannot hold you liable, including applicable affirmative defenses. If you remain silent, the court may rule before considering those defenses.

The plaintiff's evidence may go unchallenged

Taking part can allow you to question documents, testimony and other proof offered against you. If you do not participate, the court may consider the plaintiff’s proof without hearing your objections.

You could lose the chance to dispute damages

You may have grounds to challenge how the plaintiff calculated the claimed loss. Without your input, the court can consider the amount using only the information the plaintiff provides.

A practical resolution may become harder to negotiate

Early participation can leave room to discuss payment terms or another settlement. Once the court enters judgment, the plaintiff may have less reason to compromise.

What can happen after a default judgment?

If the court awards money, the plaintiff becomes a judgment creditor and may use post-judgment collection remedies. As a result, ignoring a lawsuit can trigger a cascade of legal consequences. These common instances may follow.

A creditor may garnish your wages

Through this remedy, the plaintiff can collect part of your earnings from each paycheck. If the court issues the required papers, your employer may have to withhold some earnings. State and federal limits may protect a portion of your income.

A levy can restrict your bank funds

A creditor may also pursue funds in your bank account. After receiving valid legal papers, the bank can restrict access to nonexempt money. Certain benefits and other deposits may qualify for protection, but you might need to assert a statutory exemption promptly.

A lien may attach to your property

A money judgment may create a lien against qualifying real property. The lien can complicate a sale or refinancing and may remain until the creditor files a satisfaction or the court releases it.

A judgment can harm your credit

A judgment may appear in certain consumer reports or emerge during a lender’s public-record search. The Consumer Financial Protection Bureau explains that reporting companies generally include lawsuit or judgment information for seven years or until the applicable limitation period expires, whichever is longer. A lender that discovers the judgment may deny an application or offer less favorable terms.

Interest and fees may increase the balance

Interest may accrue after the court enters judgment. Court costs and certain attorney fees can also increase the balance when allowed by law or contract. These added amounts may make the dispute costlier to resolve.

Why ignoring a lawsuit is rarely safe

A plaintiff might fail to complete valid service, or the court might dismiss the case for an unrelated reason. Neither possibility makes silence a sound strategy. Improper service may support a motion to dismiss or a request to set aside a default, but you usually need to raise that defect through the court. Likewise, you should confirm any dismissal by reviewing an entered order, not by relying on a promise or assuming the plaintiff has lost interest. The possible reward of doing nothing is small compared with the risk of losing before presenting your side.

Speak with a civil litigation attorney about your case

Time often matters after you receive a summons and complaint. A civil litigation attorney can calculate the correct deadline, identify available defenses and make the required court filing. Early advice may also create room to negotiate before a judgment limits your position. If you have been sued in Arkansas, gather every document you received and note the date of service. Then seek legal guidance to discuss the allegations, urgent deadlines and ways to protect your rights.]]> On Behalf of Hatfield Harris, PLLC <![CDATA[Are retirement savings at risk when people file for bankruptcy?]]> https://www.hatfieldharris.com/?p=69135 2025-04-13T14:25:07Z 2025-04-13T14:25:07Z In a Chapter 7 bankruptcy Some people refer to Chapter 7 bankruptcy as liquidation bankruptcy. This name comes from the fact that the courts sometimes require that people sell off or liquidate high-value resources before granting a discharge of their eligible debts. Thankfully, there are exemptions available that allow people to preserve certain resources despite needing bankruptcy relief. In a Chapter 7 bankruptcy, retirement accounts protected by the Employee Retirement Income Security Act of 1974 (ERISA) are generally exempt from creditor claims. Under both federal bankruptcy laws and Arkansas state rules, retirement savings are often exempt from liquidation. 401(k)s, pensions and even IRAs are all accounts that people do not have to worry about losing simply because they request bankruptcy relief. Just like creditors could not acquire those resources through litigation, the banks cannot force their liquidation as part of a bankruptcy filing.

In a Chapter 13 bankruptcy

The good news for those contemplating Chapter 13 bankruptcy because of their competitive income or above-average assets is that liquidation is generally not a component of Chapter 13 bankruptcy. Instead, the filer works with the courts and their creditors to try to arrange for a reasonable repayment plan. They allocate their disposable income, not their current assets, toward the repayment of their major debts. Their retirement savings are typically not at risk. Reviewing the resources an individual has accumulated, the debts that have become unmanageable and other details about personal circumstances with a skilled legal team can help people select the best type of personal bankruptcy. The sooner that people consult about their bankruptcy options, the better their chances of optimizing their protection and financial relief.]]> On Behalf of Hatfield Harris, PLLC <![CDATA[How does bankruptcy impact tax debt?]]> https://www.hatfieldharris.com/?p=69132 2025-03-12T18:06:52Z 2025-03-12T18:06:52Z of these filings are not the result of poor or reckless spending but unforeseen or surprise expenses. One potential surprise expense that could lead to debt: taxes. Whether dealing with a surprise or unmanageable tax bill, it is wise for taxpayers to consider whether bankruptcy could help them find their financial footing. One of the first steps in this conversation is to gain a basic understanding of bankruptcy options. There are many forms of bankruptcy, but the most common are Chapter 7 and Chapter 13. Key distinctions between the two include the following:
  • Chapter 7 Bankruptcy: Often referred to as liquidation bankruptcy, Chapter 7 allows for the discharge of many debts, including certain tax obligations.
  • Chapter 13 Bankruptcy: This type is a reorganization bankruptcy for individuals, which includes a repayment plan.
It is possible to use a petition for relief through bankruptcy to help manage tax debt, but approval is contingent upon several criteria.

When can a taxpayer get relief from tax debt through bankruptcy?

The answer will depend on the type of tax, the age of the tax debt, and the chosen chapter of bankruptcy. There are situations where a taxpayer could receive a discharge for income taxes through a Chapter 7 bankruptcy while a Chapter 13 may result in a more manageable repayment plan spread over a specified length of time.

What are my next steps?

It is important to reach out to a legal professional with experience in this niche area of law. A bankruptcy attorney can review your situation and discuss the benefits and risks of filing for bankruptcy to address tax debt. Bankruptcy can provide a fresh start for those overwhelmed by debt, but it comes with complex implications for tax obligations. Whether considering Chapter 7 or Chapter 13 bankruptcy, it is important to understand the overall impact on your financial situation. By staying informed and consulting with professionals, you can navigate these challenges more effectively and better ensure a more stable financial future.]]> On Behalf of Hatfield Harris, PLLC <![CDATA[Charitable contributions and tax benefits]]> https://www.hatfieldharris.com/?p=69125 2025-02-18T21:12:46Z 2025-02-12T17:09:05Z Types of donations eligible for deductions To get tax benefits from your charitable contributions, you need to donate to a qualified organization. These are typically 501(c)(3) nonprofits, such as charities, religious organizations and educational institutions. You can donate money, property, or even stocks. Cash donations are the most straightforward, but non-cash donations like clothing, furniture, or vehicles are also eligible for deductions. Just be sure to get a receipt or written acknowledgment from the organization for any donation over $250. Impact on taxable income When you donate to a qualified organization, you can deduct your donation amount from your taxable income. This means that if you donate $1,000 and you are in the 24% tax bracket, you could save $240 on your taxes. However, to claim these deductions, you need to itemize your deductions on your tax return instead of taking the standard deduction. This can be beneficial if your total itemized deductions exceed the standard deduction amount. Tips to Maximize Your Charitable Contributions Here are some common strategies for making a charitable contribution:
  1. Plan your donations: Consider making larger donations in years when you expect higher income. This can help you maximize the tax benefits.
  2. Donate appreciated assets: If you have stocks or other investments that have increased value, donating them can provide a double benefit. You can deduct the current market value and avoid paying capital gains tax.
  3. Keep good records: Always keep receipts and written acknowledgments for your donations. For non-cash donations over $5,000, you may need a professional appraisal.
  4. Bunch your donations: If your total itemized deductions are close to the standard deduction, consider "bunching" your donations. This means making two years' worth of donations in one year to exceed the standard deduction and itemize your deductions.
Additional strategies may be useful as well.

IRS requires accurate recordkeeping

Keeping accurate records of your charitable contributions is crucial. The IRS requires documentation for all donations, especially those over $250. This includes:
  • Receipts
  • Canceled checks
  • Written acknowledgments from the charity
For non-cash donations, you need to keep records of the item's condition and value. Good recordkeeping ensures you can substantiate your deductions if the IRS questions them.

Understanding IRS rules

The IRS has specific rules for charitable contributions. For example, you can generally deduct up to 60% of your adjusted gross income (AGI) for cash donations. There are also limits for non-cash donations, typically 20% to 30% of your AGI. Understanding these rules is important to ensure compliance and maximize your tax benefits. You can find detailed information in IRS Publication 526. You can make the most of your charitable giving by understanding the types of donations eligible for deductions, the impact on your taxable income and how to maximize your contributions. Remember to keep accurate records and stay informed about IRS rules to ensure you get the full benefit of your generosity.]]> On Behalf of Hatfield Harris, PLLC <![CDATA[How to calculate your taxes if you are self-employed]]> https://www.hatfieldharris.com/?p=69082 2025-01-22T17:44:06Z 2025-01-22T15:46:09Z Understanding self-employment tax Self-employment tax is a federal tax that covers Social Security and Medicare. It is essential for anyone earning $400 or more from self-employment in a year. Unlike regular employees, self-employed individuals must calculate and pay this tax themselves. It includes the following key components:
  • Social Security Tax: 12.4% of your net earnings
  • Medicare Tax: 9% of your net earnings
  • Additional Medicare Tax: 9% if your income exceeds certain thresholds
To calculate your self-employment tax, you must determine your net earnings. To do this, subtract your business expenses from your total income. Then, multiply your net earnings by 92.35%. This adjusts your income to reflect the portion subject to tax. Finally, multiply the adjusted earnings by 15.3% to find your self-employment tax amount. For example, suppose you earn $60,000 from your freelance business:
  • Net Earnings: $60,000
  • Taxable Amount: $60,000 x 92.35% = $55,410
  • Self-Employment Tax: $55,410 x 15.3% = $8,475.73
Even though these calculations can help you do your taxes independently, remember that you could be penalized if you do not do this accurately. Remember that you can hire a professional to ensure that you meet all the requirements that apply to you.

How to file your taxes

Once you know the taxes you must pay, you can start filing the forms. To report and pay your self-employment tax in Arkansas, you need to complete several forms:
  • IRS Form 1040: Your main tax return form.
  • Schedule C: Reports your business income and expenses.
  • Schedule SE: Calculates your self-employment tax.
You must fill out these forms correctly and follow all the due dates. Failing to do so can result in penalties and additional fees. Remember that your business structure can also affect the amount of taxes you pay. This guide can help you understand the basics of self-employment tax, but you will need to dig deeper into the law to understand which requirements apply to you.

Deductions and benefits

Thankfully, self-employed individuals can take advantage of various deductions to reduce taxable income:
  • Home Office: Deduct a portion of your home expenses if you use part of your home for business.
  • Health Insurance: Deduct premiums paid for health insurance.
  • Business Expenses: Deduct costs like supplies, travel, and marketing.
Identifying these expenses and keeping track of them can help you reduce the amount of taxes you need to pay. As you can see, managing your self-employment taxes does not have to be overwhelming. By understanding the components and steps you need to take, you can meet your tax obligations while maximizing your deductions. Remember to keep accurate records and seek professional advice if needed. Being informed and organized is key to a stress-free tax season.  ]]> On Behalf of Hatfield Harris, PLLC <![CDATA[How can you keep debt collectors from harassing you?]]> https://www.hatfieldharris.com/?p=69057 2024-11-06T20:05:38Z 2024-11-06T18:54:54Z What is creditor harassment? Creditor harassment occurs when debt collectors aggressively pressure you into paying. These tactics can include repeated phone calls, threats and other intimidating behaviors. The federal Fair Debt Collection Practices Act (FDCPA) protects consumers from harassment. It sets clear guidelines for debt collector practices. Here are some behaviors that violate federal laws:
  • Using threats or violence
  • Using obscene language
  • Misleading you about the debt
  • Implying you could be arrested
  • Calling repeatedly to annoy or harass
  • Discussing your debt with others without your consent
If you experience any of these tactics, it may be considered harassment under the FDCPA.

How does filing for bankruptcy affect collection tactics?

Bankruptcy can provide immediate relief from aggressive debt collection efforts. Filing for bankruptcy protection puts an automatic stay in place, which halts most collection actions against you. Here are some protections that result:
  • Stopping wage garnishments
  • Halting foreclosure proceedings
  • Ceasing debt collection calls
  • Preventing legal actions against you
Working with a skilled bankruptcy lawyer can protect your rights. An experienced attorney can guide you in finding the best way to handle your debts, ensuring you understand your options. It’s essential to remember that bankruptcy is a legal tool designed to help you regain control over your financial situation.]]> On Behalf of Hatfield Harris, PLLC <![CDATA[Understanding tax law and preparation]]> https://www.hatfieldharris.com/?p=69038 2024-03-27T19:13:06Z 2024-03-27T19:13:06Z Defining tax law Tax law encompasses the rules, policies and procedures that oversee the legal process of taxation. This includes taxes on income, property and sales. Additionally, governments use tax law to collect revenue for public services. It is important to understand the basics of tax law to fulfill your obligations and possibly save money.

Key concepts in tax preparation

Preparing taxes involves several key concepts, the first of which is income. You must report all forms of income, including wages, interest and profits from selling goods or services. Another aspect of preparation is finding deductions. For example, some expenses can reduce your taxable income, such as charitable donations or business expenses. The last factor to address is tax credits, which directly reduce the amount of tax you owe. These can include credits for education expenses or for investing in renewable energy.

Steps for tax preparation

There are a few ways you can proceed as you prepare your taxes. Gather your documents: Collect all necessary documentation, such as W-2 forms from employers, 1099 forms for other income, receipts for deductible expenses and records of tax credits. Understand your filing status: Your status, such as single, married filing jointly or head of household, affects your tax rates and deductions. Choose the right form: Most taxpayers use Form 1040, but there are different versions depending on the complexity of your finances. Fill out your tax return: Calculate your taxable income by subtracting deductions from your gross income. Then, apply the relevant tax rates to determine how much you owe or your refund amount. File your taxes: You can file electronically or by mail. Electronic filing is faster and reduces the risk of errors. Following these steps will help you stay organized and ready when it is time to file your taxes.

Common mistakes to avoid

Failing to report all income can lead to penalties and interest. Furthermore, overlooking deductions and credits can result in paying more tax than necessary. Another common but avoidable mistake is missing the filing deadline. Late filing can result in penalties and interest charges. Understanding how tax law and preparation work can help you successfully navigate tax season and possibly reduce your expenses.]]> On Behalf of Hatfield Harris, PLLC <![CDATA[Can you keep your home after your divorce in Arkansas?]]> https://www.hatfieldharris.com/?p=69021 2024-01-26T03:45:44Z 2024-01-26T03:45:44Z Considering your children's well-being Staying in the family home after divorce can offer children a sense of stability. Familiar surroundings provide comfort during a challenging time, helping them adjust to the changes. The continuity of their living space, school and neighborhood can mitigate the emotional impact of divorce, offering a stable foundation for their well-being and development.

Determining financial standing

Take stock of your joint financial assets and liabilities. Compile a comprehensive list, including income, debts and expenses. Analyzing these figures will give you a clearer picture of your financial standing as you approach divorce proceedings.

Evaluating home equity

For many couples, the marital home is a significant asset. Calculating its current market value and subtracting outstanding mortgage debt provides the equity. The equity in your home influences the division of assets during divorce.

Consideration of Arkansas laws

Arkansas operates under equitable distribution laws, meaning that the marital property division is fair but not necessarily equal. The court takes various factors into account, such as each spouse's financial contributions, earning capacity and child custody arrangements.

Budgeting for post-divorce homeownership

Once the divorce is final, maintaining the marital home comes with ongoing financial responsibilities. Budgeting becomes imperative—consider mortgage payments, property taxes, insurance and maintenance costs. Ensuring you can afford these expenses post-divorce provides a smoother transition.

Exploring options

If the financial burden of keeping the marital home proves challenging, exploring alternative solutions is wise. Selling the property and dividing the proceeds may be a viable option, providing both parties with a fresh start. You may find another residence in the same neighborhood and school zone to help reduce the impact of moving for your children.]]> On Behalf of Hatfield Harris, PLLC <![CDATA[How to handle an IRS audit]]> https://www.hatfieldharris.com/?p=69020 2024-01-12T15:54:22Z 2024-01-12T15:54:22Z Understanding why audits occur The IRS conducts audits to verify the accuracy of a taxpayer's returns and ensure compliance with tax laws. Audits do not always imply wrongdoing. They can result from random selection or because something in your return may have raised a red flag. IRS audits are relatively commonplace. The IRS conducted over 700,000 tax return audits during the financial year of 2022. Triggers may include unreported income, excessive deductions or discrepancies between your return and information the IRS received from other sources, such as employers or banks.

Responding to an audit

Upon receiving an audit notification, it is important to read and review it carefully. This letter outlines the reasons behind the IRS's selection of your return. It also tells you which documents you need to provide. Responding in a timely manner is essential. If you delay or ignore the request, it can lead to additional penalties or a more in-depth investigation. To substrate the items in question, gather all relevant documentation, such as receipts, bills, employment documents and bank statements. Organizing these documents will help you present your case effectively and efficiently to the IRS.

Navigating the audit process

You have the right to understand the purpose of the audit and to know what the IRS finds during the process. Do not hesitate to ask for clarification if you have questions or concerns. Cooperation and transparency are key. The audit might take place through mail, at an IRS office or at a location of your choice, such as your home or office. The complexity of your case often determines the type of audit you undergo. Remember, an audit is not an accusation of wrongdoing but a process to ensure tax compliance. Learning about this process can provide valuable guidance if you are facing an audit.]]> On Behalf of Hatfield Harris, PLLC <![CDATA[4 reasons mediation offers a kinder approach to divorce with kids]]> https://www.hatfieldharris.com/?p=69015 2023-12-29T01:40:20Z 2023-12-29T01:40:20Z 1. Puts children first One of the primary advantages of divorce mediation is its child-centric focus. Unlike traditional divorce proceedings, where legal battles can become emotionally charged, mediation places the children's well-being at the forefront. The process encourages parents to collaborate in crafting solutions that prioritize the needs and emotions of their children, fostering a sense of stability during a period of significant change.

2. Encourages open communication

Divorce mediation promotes open communication between parents, allowing them to discuss and decide on key issues related to the children's lives. From custody arrangements to visitation schedules, parents actively engage in constructive dialogue under the guidance of a neutral mediator. This approach often results in agreements tailored to the unique needs of the family, creating a more flexible and adaptive framework for co-parenting.

3. Promotes emotional resilience for children

Children may experience more stress and anxiety when their parents divorce. Mediation is collaborative. It helps shield children from the adversarial dynamics often present in court battles. When parents work together to find common ground, children are more likely to see a united front.

4. Offers cost-effectiveness and timely resolutions

Arkansas has 4.1 divorces per 1,000 people. Divorce mediation is often more cost-effective and efficient than a court-based divorce. The streamlined process typically requires fewer resources, saving both time and money. This financial relief can contribute to a more stable post-divorce environment. That directly benefits the children involved. In Arkansas, the shift toward divorce mediation reflects a growing recognition of its potential to alleviate the stress children experience.]]>