Credit Repair Tips - 7 Steps to Rebuild and Protect Your Cred... by J.Michelle

You can find out if you're eligible by filling out the Pre-Qualifier form on the IRS website. Some individuals may qualify for an Offer In Compromise, which enables them to settle their taxes for less than the full amount. You can also try applying for a payment plan if you owe $50,000 or less.

The government will grant you an extra six months, but you'll have to pay a penalty of 0.5% on any outstanding balance.

Instead, file your tax return like normal and file an extension if you need more time to pay. If you find yourself with taxes that you're unable to pay, the worst thing you could do is not file a return or not pay at all. However, it is not allowed to take money from need-based retirement benefits, like Supplemental Security Income. It can also place a lien on your property or revoke your passport. If you owe back taxes and you have made no effort to set up a payment plan, expect the government to come at you with everything it's got. Most creditors are not allowed to garnish your retirement accounts to recoup what you owe them, but the IRS is an exception. This could solve your problems, provided you don't go out and accumulate more credit card debt. Even if it's not, the advantage is that you're locked into a single, predictable monthly payment instead of your balance continuing to accrue interest. Depending on your credit score, the interest rate may be more affordable than your credit cards. If you charge $1,000 to your card but you can only afford to pay $50 at the end of the month, it will take you two years to pay back, and you'll end up paying an extra $200 in interest, assuming a 17% interest rate.Ī personal loan is also worth considering. But if you do carry a balance, it can get expensive quickly. If you don't carry a balance from month to month, you don't have to worry about paying any interest at all. The average credit card interest rate is about 17%. Think about signing up for a secured credit card, and make at least the minimum payment on all of your other bills to avoid further late-payment penalties and defaulted loans. You'll also want to begin taking steps to rebuild your credit. If you're not having any luck negotiating on your own, consider enlisting the help of a reputable credit counseling service. Settling a loan won't look as good to lenders as paying the balance in full, but it's better than continuing to run from the debt. See if you can come up with some kind of payment plan or settlement agreement. Even if you've already defaulted, it's still a good idea to reach out. The company may be willing to work with you to set up a payment plan so that you can avoid going into default. Ideally, you can stop this situation before it starts by reaching out to your creditor as soon as you begin to have trouble making the payments. Young man with money flying out of his wallet.

Credit Repair Tips - 7 Steps to Rebuild and Protect Your Cred... by J.Michelle