‘Tis the season for tax refunds! Other than Christmas, this may the season that most Americans look forward to during the course of the year. It is the time of year when many of us plod through the misery of preparing and filing our tax returns but get rewarded with tax refunds from the federal government. There is always the impulse to treat ourselves to something special, looking at the refund as “found money”, but if you are carrying any debt, you may want to think about strategies to use that refund to retire all, or part of, your debt.
When thinking of using your tax refund to pay down debt, you will want to have a strategy in place to get the “most bang for your buck”. For example, if you have a credit card with a $10,000.00 balance and you receive a $1,000.00 tax refund, paying $1,000.00 on that balance isn’t really going to do much for you – your balance will only decrease by 10% and your monthly payment will not decrease by very much. Its like trying to put out a house fire with a squirt gun. However, if you if you have a credit card with a $1,000.00 balance and receive a $1,000.00 refund, you can pay-off the entire balance and eliminate that payment from your monthly budget.
Better yet, you can leverage your refund to settle multiple accounts for less than what you may owe through negotiating settlements with your creditors. This strategy may not be for the faint of heart as it requires patience, multiple rounds of contact with creditors and an eye for detail to make sure you have a written agreement to evidence your settlement and getting monies paid to the correct address within a very limited time frame. At Harold Shepley & Associates, LLC we offer debt negotiation services that provide you the peace of mind of having attorneys handling your accounts and negotiating on your behalf to get you the best settlements possible.
Another option, depending on your situation, may be bankruptcy. If your debt is so overwhelming that paying it off or negotiating settlements just won’t work for you, bankruptcy may be a very cost-effective option for you. For a one-time fee, you can file bankruptcy and, in most cases, retain the balance of your tax refund – you get rid of your debt and get to keep your tax refund!
At Harold Shepley & Associates, LLC we can help you find a solution to your debt issues and put your tax refund to its best use. The call and the consultation are free. You have nothing to lose, but your debt!