Mortgage Refinance: Taxation, Interest Rates and Points

Posted by Rana & filed under Home & Mortgage Refinance Information.

If you’re a homeowner, then you know there are several different reasons as to why you would want to refinance your mortgage. You may want to refinance in order to reduce your monthly mortgage payment or perhaps to consolidate your bills in an effort to pay off debt you have incurred over the years. Another factor you might want to consider is mortgage refinancing to protect your payment from rising interest rates.

Mortgage refinancing to lower your monthly payment is an effective way to make room in your budget for other financial needs. One way to achieve this is to look for a mortgage refinance loan with a lower interest rate that you qualify for. Being able to pay off some of your debts is a huge motivator for mortgage refinancing. It is important to keep in mind that consolidating your bills does not completely eliminate your debt, but it does make what you owe more manageable. Depending on whether you purchased your home on an adjustable interest rate; you could opt to refinance your mortgage on a fixed rate to ensure consistent interest rates in the case of economic fluctuations.

Taxation, Interest Rates and Points

How do taxation, interest rates and points come into play with mortgage refinance? First of all, your mortgage related refinancing costs are tax deductible. Additionally, points can also be deducted over the life of your home loan. However, there are some restrictions you should be aware of such as the fact that the actual amount you are able to deduct is based upon your income level. Also, keep in mind that additional charges such as closing costs, attorney fees, notary fees, and so on are not deductible.

While points are a common feature of home mortgages, it’s not always beneficial to pay points for mortgage refinancing purposes depending on your future plans. The reason for paying points in the first place is to decrease mortgage rates. In the case of mortgage refinance points, you have to make a decision about paying by considering the time frame you will keep the loan for. Holding on to the loan for a few years will make the points work to your advantage as you can save a significant amount of money. On the flip side, if you’re thinking of moving in a shorter time period and possibly refinancing for a second time, you don’t stand to gain anything from paying the points. Because life can be extremely unpredictable, sometimes the decisions you make which are based on your plans don’t exactly turn out the way you want them to, however all you can do is make an informed decision and hope to reap the rewards.

Mortgage Refinance Options

When it comes down to it, the most productive way to find out what all your options are is do some old fashion research! Get on the Internet or go down to your local library to learn more about the advantages of mortgage refinance and the taxation, interest rates and points that are involved. When you do find a lender/company that you think is right for you, don’t forget to ask important questions regarding your loan and don’t be afraid to express all of your concerns upfront, this way there are no surprises and your mortgage refinance can go as smoothly as possible.

Mortgage Refinancing With Jumbo Mortgages

Posted by Rana & filed under Home & Mortgage Refinance Information.

The rise in housing prices across the nation has ushered a growth in the number of jumbo mortgage refinance applicants. Whether purchasing a mansion in Palm Beach or a country cottage in Tennessee, many Americans are choosing to finance with a jumbo mortgage; an option no longer reserved to upper-end luxury residences.

What is a jumbo mortgage? A jumbo loan is a loan exceeding the maximum eligibility or conforming dollar limit for purchase by Freddie Mac and Fannie Mae, the two largest secondary market lenders that buy the bulk of residential mortgages in the United States. The value is adjusted each year based on average home prices.

What is jumbo mortgage refinance?It is the process of obtaining a mortgage that is larger than the federal guidelines. Due to the closing costs, jumbo mortgage refinance can be more expensive than refinancing a traditional loan.

Although a jumbo mortgage is similar to a traditional loan program, there are differences between the two forms of mortgage financing. First, jumbo mortgage refinance requires a slightly higher down payment. No money down programs are usually not available; a minimum of 5% down payment is necessary. Secondly, small interest rate variations in a jumbo mortgage affect the monthly payment to a greater extent than in a conventional loan. The risk of an interest rate increase can result in a large dollar amount increase. Due to the size of the loan, jumbo mortgage lenders often offer variable loan programs to borrowers. Some of the typical loan programs available through jumbo mortgage companies include:

10, 15, 20, or 30 Year Fixed Rate Jumbo Mortgage Refinancing 40- or 50-year amortization (allowing the jumbo loan borrower to repay the loan over a longer period of time) 80/20 & 80/15 Jumbo Loan programs An interest only option (making it possible for borrowers to defray any repayment of principal for a few years – thus allowing them to save on their monthly payments) Stated Income Jumbo Mortgage Refinancing Adjustable Rate Jumbo Mortgages of 1/1, 3/1, 5/1 and 7/1 ARM products No Documentation Jumbo Mortgage Refinancing

Consumers resort to jumbo mortgage refinance for one of several reasons:1. Lower the total mortgage cost by reducing the term: Borrowers might choose jumbo mortgage refinance in order to save a substantial sum on total interest over the term of the mortgage.2. Lower the interest rate to decrease the monthly mortgage payment: Obtaining a jumbo mortgage refinance when mortgage rates are low allows homeowners to lower their monthly payments.3. Convert an adjustable rate mortgage (ARM) to a fixed rate mortgage: A borrower who anticipates that his ARM is going to increase can switch to a jumbo mortgage to lock in at a fixed rate. 4. Debt consolidation: A jumbo mortgage refinance enables consumers to tackle other higher-interest debt, such as installment loans or credit balances and consolidate them into a lower-rate home loan.5. Take out a larger loan and obtain a “cash out”: With a jumbo mortgage refinance, borrowers can obtain a “cash out” mortgage or a larger mortgage that allows them to use the extra cash for other expenditures such as home renovations or a college education.

Finally, before homeowners embroil themselves in a financial commitment such as a jumbo mortgage refinance, they should 1) carefully consider their options, 2) explore the upside and downside of each, and 3) determine which one of the programs is the most attractive prospect or best corresponds to their situation and needs.

Cash Advance APR: An Explanation Please!

Posted by Rana & filed under Payday Loan & Personal Loan Information.

By: Mevish Jaffer

As life has a tendency to throw you some curve balls every now and then, financial emergencies, though unexpected are still quite a common occurrence. So what do you do if you find yourself in such a predicament? Do you turn to your savings? What if you don’t have any savings?

Payday cash advance loans, also referred to as payday loans may just be your solution to unforeseen emergencies that require immediate financial attention. Whether you need it for an unexpected medical bill or as a means of financial sustenance in between paychecks, a cash advance is literally one of the quickest ways to acquire money when you really need it.

The Cash Advance Loan Process

Cash advance loans are usually on a short-term basis and require repayment after a period of two to three weeks. Having bad credit is not an issue with cash advance loans, as credit checks are not mandatory for approval purposes. In fact, there are special bad credit cash advance services that are available to help you attain a loan should you qualify as a bad credit borrower. Additionally, online lenders make the approval process quick and convenient, allowing you access to funds on the same day you’re approved. The typical payday lender generally requires the following information from you:

Name Address Proof of employment Banking related information

Once all of your information is processed and you are approved, you could have the cash you need in your checking account within mere hours. The popularity of cash advance loans has a lot to do with the convenience and the rapid approval process involved.

Cash Advance APR and Interest Rates

The associated fees for a cash advance loan can be somewhat difficult to understand. The APR for a loan is usually a rate quoted for the year; however payday advance loans have much shorter terms. So in order for you to understand the total cost of your cash advance loan, you need to find out about interest rates and fees. In addition, states may have different rates, so when looking for a California payday advance, be sure to check the rates in California.

Cash advance lenders are typically always forthcoming about the interest rates and fees involved with your loan. Additional costs in the form of an application and/or processing fee may also be included. As for actual interest rate amounts, each cash advance loan lender/company charges varying rates. Also, keep in mind that if you fail to repay your loan by your next payday, you will incur late fee charges in addition to your total loan amount.

Cash Advance Loans: Not a Long-Term Option

While cash advance loans are a great source of financial support in times of need, they should no be used on a long-term basis. If you require a long-term loan, you should consider alternative options. Remember that you are required to repay your cash advance loan by your next payday, and failure to do so will obligate your lender to impose penalty charges and possibly raise your interest rates. If you have taken all of your options into consideration and still think a cash advance is right for you, make sure to shop around for a lender that will give you a good deal on your loan. Don’t forget to compare rates and terms and always watch out for those hidden fees that have a tendency to creep up on you!

Cash-Out Refinancing: Transforming Home Equity into Cash and Credit

Posted by Rana & filed under Home & Mortgage Refinance Information.

By: Americans who have built equity in their homes can put it to good use through the mechanism of a cash-out refinancing. Basically, with every mortgage payment that is made, a greater investment in the home’s equity takes place. Some of that equity can be traded for cash by way of a cash-out refinancing.

Cash-out refinancing involves refinancing your mortgage for more than what you currently owe and then pocketing the difference. The threshold for a cash-out mortgage refinance is a new mortgage with a loan amount that is at least 5 percent higher than the original mortgage balance.

To illustrate the concept of cash-out refinancing, let us say you owe $50,000 on a $100,000 house and need $20,000 to add a guest room. You could refinance your mortgage for $70,000, and the bank will then write you a check for the difference of $20,000. Cash-out refinancing replaces your first mortgage with a new mortgage.

Typically, the interest rate on a cash-out refinance is lower than the interest rate on a home equity loan. If the mortgage refinance has an interest rate that is higher than your current rate, then mortgage refinancing is not a good idea. In such a case, a home equity line of credit (HELOC) would be a more sensible choice.

Homeowners are usually allowed a mortgage refinance up to 100% of their property’s value. However, if a homeowner borrows more than 80% of the home’s value, he or she may have to pay a higher interest rate or private mortgage insurance. In such a scenario, a HELOC would probably prove to be a more favorable option.

There are closing costs associated with mortgage refinancing, and they can amount to hundreds or thousands of dollars. Homeowners are advised to first verify whether interest rates have dropped sufficiently so that they can recover the costs in a year or two with the savings generated by the lower interest rates.

Cash-out refinancing provides access to substantial funds, which are distributed in a lump sum and can be utilized for any purpose. Homeowners frequently choose a cash-out refinance to pay for such major expenditures such as:

Business expansion and business ventures Payment of high-interest credit card debt Home improvements and repairs (ex: a new kitchen or bath) A vacation A real estate investment (i.e., a vacation home) College tuition Purchase of high-cost items, such as a new vehicle, a boat, or car

A cash-out refinancing can also provide homeowners with an alternative source of income, enabling them to have cash on hand for emergencies or unforeseen opportunities.

In sum, cash-out refinancing offers Americans the choice of tapping into their home equity and exchanging it for a potentially large amount of cash. Cash-out refinancing offers numerous benefits, and when used properly, is a good way to make money work for the homeowner.

Getting a Lower Credit Card Rate

Posted by Rana & filed under Credit Card Debt Consolidation Information.

Are you receiving an outpour of credit card offers through the mail or email stating that you’ve been pre-approved for a line of credit? Well if so, you’re certainly not alone! With all of the different features, benefits, and rewards that credit card companies offer, it’s hard to determine which one will be your best option.

Credit Card Interest Rates

Many credit card companies boast lower rates than their competitors, however if an offer sounds too good to be true, it usually always is! While it may be tempting to go for the first juicy credit card offer that comes your way, remember not to be too impulsive. Find out about different credit card companies’ annual percentage rates. You should always read the fine print so to speak, and watch out for hidden fees that are never overly emphasized by credit card companies.

The most popular type of credit card rate out there is the “0% interest rate” offer. Who wouldn’t want a zero percent interest rate credit right? However, you have to make sure that’s what you’re really getting. While some zero percent credit card rates are completely legitimate, make sure you find out whether it’s only an introductory rate, which a lot of zero percent credit card rates tend to be.

You also need to understand what type of credit card rate you’re going to get. Credit card companies generally offer either fixed or variable interest rates:

Fixed rate – If you choose a credit card that has a fixed interest rate, you are charged with the same rate throughout the whole year. Variable rate – If you opt for a credit card that imposes a variable interest rate, your interest rate charges vary and are contingent upon external financial measures.

Lock in a Lower Credit Card Rate

Because the lower introductory rates that most credit card companies offer tend to significantly increase all of a sudden, it’s important for you do your research in order to truly lock down the best credit card rate. You can go to your local library or get online and start the research process.

Credit card companies that offer higher interest rates tend to compensate by luring you in with special offers and discounts on countless services such as car rental deals and much more. Lower credit card interest rates are most often offered by mid-sized banks. Once you have located a lower rate bank, make sure you fully understand the credit card rates that are being offered before going forward.

Shop Around

While it’s not exactly wise to apply for the first few appealing credit card offers that come through the mail, you shouldn’t disregard them either. Take some time to call the credit card companies you receive offers from and go over rates, terms, and other important information that applies to the credit card. You don’t stand to loose anything by doing this and it only takes a few minutes of your time to verify the information presented in your offer letters. It’s also important to take the time to shop around. Find out about several different credit card companies and what they have to offer, this way you will have many more options at your disposal. Remember that lower credit card rates are out there and locking in a lower rate could also prevent you from getting into credit card debt down the road. You just have to do some research and know what you’re looking for.

Smart Payday Loan Borrowing: How To Avoid The Domino Effect of Debt

Posted by Rana & filed under Payday Loan & Personal Loan Information.


Payday loan borrowing is one of the most effective, time-saving, convenient, and hassle-free ways to get cash instantly. However, with interest rates reaching as high as 650%, payday cash advance loans are also one of the surefire ways for consumers to plunge into the abyss of debt.

The following tips will provide guidance to consumers on smart payday loan borrowing:1. Pay the cash advance loan on time: Borrowers who are unable to pay off the payday loan on the specified date, defer or roll over their payments. By extending the term of their payday loans, they end up accumulating high finance charges, interest and penalties.2. Utilize payday loan borrowing as a last resort: Borrowers should avoid using payday loans as a regular quick fix.3. Borrow a minimal amount that you can afford to repay in its entirety by the next payday. 4. Avoid businesses that encourage roll-over payday loan borrowing.5. Read the fine print before finalizing any cash advance loan: Consumers should read and make sure they understand thoroughly the fine print in an emergency payday loan contract to determine the fees (application and wire fees, for instance), charges, interest fees, and terms. They should look out for signs of predatory lending and not hesitate to ask the lender to provide company information.6. Evaluate income and expenses: To ensure constructive payday loan borrowing, consumers should look for ways to increase their income and/or reduce their expenses. This can be achieved by developing a savings plan, budgeting as well as tracking expenses, and finding ways to save.7. Cash out the spending money: Smart borrowing can also be effectuated by paying in cash for discretionary expenses such as shopping, entertainment, and dining.8. Compare payday loans offered by different lenders.9. Avoid an emergency payday loan that asks for an advanced fee before even obtaining the loan. 10. Shop around for the cash advance loan with the lowest annual percentage rate (APR): Another recommended payday borrowing tactic is to research payday loans offering the lowest APR. A lower interest rate is beneficial in cases of loan extension and lightens the financial burden upon repayment of the emergency payday loan.11. Ensure that there are sufficient funds in the savings account: A borrower’s savings account could serve as a buffer for unexpected expenses. 12. Find a trustworthy lender: Proper payday loan borrowing also involves verifying the lender’s credibility and background in order to ensure that the consumer is not dealing with a scam company. This can be done by consulting the Better Business Bureau or the Chamber of Commerce where the lender is affiliated. An online investigation, though time-consuming, can also be conducted. The importance of payday loan borrowing from a trustworthy institution that assures the confidentiality of the client’s transaction and personal information cannot be over-emphasized. 13. Consider an overdraft protection offered by banks: An overdraft protection protects a borrower’s account from incurring charges when he or she has insufficient funds.14. Beware of costly payday loans and offers that seem too good to be true

In summary, before resorting to personal loans, consumers should shop around thoroughly and implement the smart borrowing tips outlined above. This will prevent Americans that are struggling to make ends meet from being trapped further into debt and will save them a lot of money, worry, aggravation, and stress.

Dealing with Tax Debt Collectors

Posted by Rana & filed under Tax & Bankruptcy Law Information.

Imagine coming home from a hard day of work only to find out that you have several different messages from pesky tax debt collectors that just won’t stop hounding you! If you’re someone who doesn’t have to imagine this scenario because you know first hand what it feels like, then you’re not alone! Dealing with tax debt collectors can be extremely frustrating; however it’s important to try to stay calm and keep your cool no matter how difficult it may be.

The Never-ending Collection Calls

No matter what lengths you go to in an effort to avoid tax debt collectors (for examples, by employing clever deviation tactics such as answering the phone by saying “Pizza Hut, can I take your order”), the collection calls will keep on coming so long as you still owe an outstanding tax debt amount. There is absolutely no use trying to run away from tax debt collectors as they always find a way to catch up with you in the end; however you can better deal with them if you are aware of certain steps that you as a debtor can to take to ensure you are not constantly pestered by collection calls.

Make sure you know your rights; a tax debt collector has an obligation to treat you without any form of bias over the phone and should definitely respect your privacy. Additionally, you have the right to contest any debt brought up against you. Do not be intimidated when you’re on the phone with a tax debt collector. It could prevent you from getting important information such as the name of the person you’re dealing with, phone number, fax number, and the total amount of debt in question. It’s wise to keep detailed documentation of all of your correspondences with the tax debt collector, should there be a need to go back and dispute any false charges or accusations made against you. As hard as it may be, don’t get frustrated with tax debt collectors. While it may be tempting to give out false phone numbers and other personal information in an attempt to get them to leave you alone, it in fact only provokes them to further contact you on a more frequent basis.

Prevent Tax Debt

When you find yourself in a heap of tax debt, all you can think about is how to achieve tax debt relief, but what about preventing tax debt all together? There are ways of keeping yourself debt free and managing the debt you have incurred efficiently. Know how to manage your debt to work to your advantage. Remember that the priority debts are those with the highest interest rates. Another method to keep you from being burdened with tax debt is creating a budget for yourself. Keeping track of your expenses is a great way to determine where you can cut costs. Perhaps the greatest way to ensure tax debt relief and prevention and avoid problems with the IRS is to have savings set aside. Unexpected debts should rather be expected as life is nothing if not unpredictable.

Settling your tax debt is never easy and dealing with collectors only adds to the frustration of it all, but handling yourself in a rational manner is completely possible if you remember to maintain your composure and don’t forget that you are entitled to certain privacy rights that cannot be overlooked.

Credit Card Debt Reduction Strategies: Getting You Back To Zero Balance Due

Posted by Rana & filed under Credit Card Debt Consolidation Information.

Credit cards can be either a blessing or a curse, depending on whether or not they are utilized judiciously. Although plastic money has facilitated our lives, the reality remains that in the past two decades, more and more Americans have slipped into the black hole of credit card debt. Paying down debt can be quite stressful, let alone difficult. Yet, those struggling to pay off their credit cards each month need not despair, for there is a host of credit card reduction strategies available to them.

Here are a few suggestions to eliminate credit card debt:1. Pay more than the minimum: If paying off the entire balance is not possible, then consider making a payment that exceeds the minimum amount due.2. Call the credit card company and ask for a lower interest rate. 3. Transfer balance to a low-interest rate card: Consumers can transfer their balance to a credit card with a more attractive interest rate (ex: one with an introductory rate between 5.9 percent and 6.9 percent), thus making it easier to pay off the principal.4. Obtain credit card debt relief through the Debt Reduction Pyramid: This credit card debt management method consists of knocking off the lowest-balance bills first. Once the card with the lowest balance is paid, concentrate on the second card on the pyramid and then move on to rest of the cards until they are all paid off.5. Size up bills by interest rates: An alternative form of credit card debt settlement involves listing the credit cards with the highest interest rates and then attacking those in descending order, namely the balance with the highest annual percentage rate first. Once that one is paid off, focus on the debt with the next highest interest rate.6. Cash out the investments and savings and use the proceeds toward credit card debt settlement.7. Obtain a loan from family and friends.8. Take out a home equity loan and use the loan proceeds for credit card debt management.9. Borrow from a 401k qualified retirement plan: As compared to other credit card reduction strategies, this option allows debtors to borrow $50,000 or up to 50% of the 401k account’s value, whichever is smaller.10. Contact a consumer credit counseling service: Amongst the credit card debt reductions strategies that certified consumer credit advisors deploy on behalf of debtors are:

Assessing the financial situation. Creating a spending plan debt consolidation into one convenient monthly deposit. Negotiating terms such as lower interest rate, waived late fees, and a lower repayment schedule with the creditors.

11. Self-help measures: The following simple credit card debt reduction strategies can help consumers save $50 per month:

Packing your own lunch Using coupons for groceries and purchasing store brands. Shopping at discount and consignment stores. Cutting down on outings (i.e. restaurants, movies)Offering handmade cards and gifts. Tracking spending on a regular basis to determine which ‘luxuries’ can be avoided

Any one or a combination of these credit card debt reduction strategies will put the consumer on the right track, under the condition that he or she sticks with the pay-down plan.

With current charge card debt in the U.S. surpassing the $360 billion figure, it is logical and imperative that consumers take all the measures possible to eliminate credit card debt. The credit card debt reduction strategies outlined above will keep bill-swamped consumers from sinking further into debt.

Consumer Credit Laws: Ensuring an Arms-Length Transaction

Posted by Rana & filed under General Debt & Loan Consolidation Information.

Credit enables consumers to pay for goods and services without having to pay the full price of the merchandise at the time of purchase. A credit card issued by a financial institution is one such form of consumer credit. Consumer credit laws protect an individual’s right to a fair and open marketplace and provide guidelines for the credit industry. Therefore, before businesses extend credit or customers deal with businesses offering credit, they should familiarize themselves with consumer credit laws.

Consumer credit laws exist at the state and federal levels. While there are significant nuances between the different state consumer credit laws, most are based on federal laws and various versions of state laws. What follows is an overview of important consumer credit laws:

1. Uniform Consumer Credit Code (UCCC): This statute, adopted in seven states and Guam, protects consumers who purchase goods and services on credit by, for instance, ensuring that they receive adequate credit and by setting a ceiling on rates they can be charged for credit. It clarifies, simplifies and updates laws regulating consumer credit and usury. 2. Consumer Credit Protection Act: This law requires creditors to disclose to consumers credit terms and conditions, such as interest rates, payment due dates, collection costs, and late penalties. It restricts the garnishment of wages, protects consumers from loan sharks, and prohibits discrimination based on sex or marital status in the extension of credit. This statute regulates credit card companies, credit reporting agencies, and certain credit card debt collectors.

The Fair Debt Collection Practices Act (or FDCPA), which is part of the Consumer Credit Protection Act, aims at eliminating illegal and unethical credit card debt (and other types as well) collection tactics. For example, it offers consumers the opportunity to dispute and obtain confirmation of credit card debt information. It also sets forth remedies and penalties for violations of the Act. On a pertinent note, each state has a credit card debt statute of limitations, defined as the period after which creditors cannot sue a consumer to collect the debt. The credit card debt statute of limitations begins on the customer’s last payment date or last activity date. The Truth in Lending Act (TILA), also part of the Consumer Credit Protection Act, was passed to combat abuses in consumer credit cost disclosures (i.e. in credit card plans offered by telephone, by mail or by applications distributed to the public) and to streamline disclosures throughout the credit industry by requiring that credit terms be spelled out.

3. Fair Credit Reporting Act: This statute provides procedures for correcting errors on a consumer’s credit record and mandates that such a record only be furnished if there is a legitimate business need. Individuals who have been denied credit may request a free credit report within 30 days of denial. 4. Bankruptcy Reform Act of 1978: Once a consumer files a bankruptcy petition, creditors must cease all debt collection efforts.5. Fair Credit Billing Act: This law, which applies only to open-end credit accounts, provides a step-by-step procedure for resolving billing errors and protects a customer’s credit rating while the consumer is settling a dispute. 6. Fair Credit and Charge Card Disclosure Act: Card issuers must disclose information such as annual fees, grace periods, and APRs on credit cards, as well as any rate increase associated with credit insurance. 7. Fair Debt Collection Practices Act: This law prohibits credit card debt collectors, among others, from engaging in such acts as:

Employing profane or obscene language Threatening or utilizing violence Publishing a list of consumers who allegedly refuse to pay their debts.

8. Equal Credit Opportunity Act: This statute prohibit creditors from discriminating against an applicant for credit on the basis of sex, age, color, religion, marital status, receipt of welfare, or national origin. The Equal Credit Opportunity Act also prevents creditors from discriminating against consumers who, in good faith, exercise any rights under the consumer credit laws. 9. Credit Practices Rule: This law makes it unlawful for a creditor to charge a consumer late fees simply because the he/she did not yet pay a late fee he or she owes. 10. Right to Financial Privacy Act: Under this Act, the government is prohibited from accessing financial record information about an institution’s customers, unless certain conditions are met.

In summary, consumer credit laws provide, for the most part, rights to consumers and responsibilities to institutions extending consumer credit. They protect, for instance, struggling consumers confronted by credit card debt, by ensuring that they are treated fairly and honestly.

Tax Debt Payment Options

Posted by Rana & filed under Tax & Bankruptcy Law Information.

The Trouble with Tax Debt

Many people today are facing the financial challenges that go along with being in debt. Yet, with all the ways you can be in debt in this day and age, tax debt is perhaps the worse kind! Additionally, by the time penalties are added on to your accrued taxes, you’re pretty much caught in a financially sticky situation. So what kinds of mitigating circumstances can lead you to tax debt in the first place? Tax debt generally stems from financial difficulties involved with situations such as:

Extended periods of unemployment Layoffs at work Medical related problems Accidents Marital crisis (separation or divorce)

Tax Debt Relief Tips

It’s easy to feel extremely overwhelmed when you’re burdened with tax debt; however the key is to remain positive, keep an open mind and basically not be defeated. There are also several tax debt payment options you can choose from to help you become debt free or at least lessen your financial load.

Tax Debt Attorney: One option you can consider is consulting with a tax debt attorney. You may not be big on seeking legal counseling, but this is where keeping an open mind comes into play. A tax debt attorney can offer you some valuable advice and represent you in court. Just bear in mind that tax debt attorneys are experts who can help you to figure out the best course of action in dealing with your tax debt. They also have the ability to engage in negotiations with the IRS which can result in some sort of tax debt relief for you.

Home Equity: You can also use the equity from your home (if you have enough) to apply for an equity line of credit or home equity loan. If you are not sure the amount of equity you have in your home or how much you should borrow, use mortgage calculators online to easily find out. The funds you attain can be used to pay for your tax debt, including accrued penalty fees.

Garage Sale: You’re probably thinking that the only cost a garage sale will cover is dinner and perhaps dessert, however you may be wrong! There is absolutely no telling how much money you can make when you sell some of your old valuables. While you are not guaranteed to turn over full tax debt coverage, it’s worth a shot to make some extra money that will no doubt be of help. Don’t forget that one person’s junk may be another person’s treasurer!

Go Straight to the Source – IRS: Since it’s the IRS that demands you settle your tax debt, it only makes sense to confer with them to try and work out a resolution. This is where being positive comes in handy, the IRS forms and services might just work out a repayment plan that will help you pay off your debt.

Admit Defeat: Always remember that “blood is thicker than water.” As hard as it may be to do, you can always turn to family and close friends for help. It may be embarrassing and perhaps even a little uncomfortable, but think about this way; in times of financial crisis, if you can’t count on your family and friends, then who can you count on?

If you’re desperately seeking relief from your tax debt, then the first step is to decide on an appropriate plan of action that will help you get there.