Stop us if this starts feeling familiar:
You have a tax debt—a big one. Things look bleak, the bills and fees are piling up, and you’ve just about reached the end of the rope.
Of course, life hasn’t stopped just because you have a tax bill. Every other creditor you have still wants their piece of the pie: medical bills, student loans, credit card payments, a mortgage, and everything else.
With such a tax bill looming, after a point it may just seem like you only have one option for getting out from under your debt: Bankruptcy.
For many people dealing with a serious tax debt, it can seem impossible to get out from under your tax debt. In some extreme situations, the prospect of a bankruptcy is often the only sense of relief they can think of.
But it’s not real relief. Filing for bankruptcy has its own ramifications that can derail your financial life for years to come.
What else can you do?
As experts who have dealt with millions of dollars in tax debts, liens, and all sorts of issues with the IRS, we understand what you’re going through. And trust us, we know it’s scary. But it shouldn’t have to be.
We think it’s important to understand the other options available to you so you don’t have to go to the extreme of bankruptcy to deal with your tax debt. The road ahead will be a long one, but you don’t have to go it alone.
There are a few options in front of you to help you deal with a major tax debt. They don’t all necessarily get rid of the debt, but they can help relieve some of the pressure associated with it. We’ll walk through them one by one.
One of the biggest strains for many people dealing with a debt is harassment. You receive letter after letter, call after call, and barely have enough time between reminders of your debt to spend time actually making a plan to deal with it in the first place.
Getting the IRS off your back can be a huge step, even if it hasn’t solved the core issue of the tax debt. In particular, if someone is speaking on your behalf, you can defer some of that contact to them and give yourself an inch of distance from the stress.
Contrary to popular belief, the IRS really isn’t completely unreasonable! In fact, you may be surprised at how often they lower tax bills, listen to appeals, and even get rid of debts entirely.
It is possible to negotiate with the IRS and give yourself a firm footing with your tax debt, and this can really help you avoid bankruptcy! However, we don’t recommend it to everyone. The truth is, most people who aren’t lawyers or CPAs don’t have the necessary knowledge base to deal with the IRS—so most people leave their conversations with the IRS more frustrated or upset than before.
Like many creditors, the IRS is usually willing to work with you if it means getting a debt paid. The simple truth is that you may not be able to pay back your tax debt all at once! You have plenty of other bills, and you may not have enough stored up in your nest egg to throw several thousand at Uncle Sam on a whim.
A repayment plan can be the best solution to getting your head above water on your tax debt while also keeping some cash in your wallet. You may be able to secure a regular payment schedule that you can plan for, similar to a bank loan. Not only can you avoid bankruptcy, but also you’ll have a clear sense of when you need to make payments.
If you’re looking to deal with the IRS, it’s best to have someone who can advocate for you. Bringing people onto your personal finance team is advantages not only in the short term, but in the long term, as well.
A professional tax attorney, CPA, or a tax relief agency can help you navigate the challenging world of tax debt. It’s not just about avoiding filing for bankruptcy. It’s also about ensuring you feel as comfortable and as confident when addressing your tax debt as possible.
Bankruptcy is one of the worst financial outcomes the average taxpayer can imagine, but when you’re dealing with a large tax debt, is can seem like the only way out. That’s not fair to you, your family, or your financial future.
By exploring the alternatives to bankruptcy, you can make a financial decision that’s right for you. Not every alternative is right for every person, but knowing that bankruptcy isn’t the only option is the first step out.
For the next step, just call us. We’re happy to help.
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