Tax Refund Knoxville
Tax season ends with most of us Americans getting a little extra money in their pocket. Recipients of a tax refund often choose to spend money on frivolous items or vacations. Those refund recipients who are more money savvy might invest the money or put it in savings. Applying a tax refund to secure the future of your financial situation is the best use of this annual windfall. Justin Brackett and Brent Strunk are debt relief lawyers with offices in Maryville and Knoxville. They offer a free consultation to advise you on the best use of the tax refund you receive this Spring.
Using Your Tax Refund to Become Debt Free:
Recent studies show that 46% of Americans currently carry a credit card balance. Many more owe a lot of medical bills or personal loans they cannot afford to pay in full. Before you spend your tax refund, evaluate your debt. Organizing your bills and noting who you owe will help you tackle your debt most effectively when you receive your tax refund. Paying off one credit card at time is a popular decision among financial advisors because the less cards you owe, the less monthly payments you will have to make in the future. The balance with the highest interest rate, like payday loans, is generally the best debt to begin with.
Paying off debt is the best investment you can make, because it beats the rate of return for any savings accounts. Most people with overwhelming debt make the minimum payments, so applying your tax return to your balance will help you eliminate the extra interest you would have otherwise paid. For example, if you pay 15% interest on an account, paying off the account will be like you are receiving a 15% rate of return, tax-free!
If you are stuck in a rut of only being able to pay the minimum payments, then negotiate a settlement with your creditor. They may accept a final lump sum payment to satisfy the whole debt. Don’t be afraid to ask for a huge reduction in the balance if you can offer a lump sum settlement. You may be surprised at how much they will accept! And you don’t get what you don’t ask for.
Finally, make sure you get all the terms of the settlement in writing before you send in your payment. Otherwise, they may just apply your payment and still try to collect the balance owed on the account.
Fight the Enemy:
While you are evaluating your debt, examine how you got in debt. Being in debt can become a vicious cycle unless you find the source of the issue. Everyone has a unique financial situation, so looking over your personal records will help you find out how to break the cycle. Using some of your tax refund to open a savings account is an excellent way to help you stay out of debt for the following year. But if you are already in debt, make sure you use every dollar of your tax refund to knock out as much debt as possible and set yourself up to be debt free ASAP.
Making a financial plan is essential to staying out of debt and it will help you learn and adopt good financial habits in the future. Brackett and Strunk go through a budgeting exercise with every one of their clients. This helps identify holes in your budget and helps you start to plug the holes and start a system of saving money. They want to help you understand why you keep getting back into debt and how to stop the vicious cycle.
Brackett and Strunk help consumers dispute debts when there is a good defense, settle debts for substantial savings, and file for bankruptcy relief if all else fails. Bankruptcy should be a worst case scenario. That’s why Brackett and Strunk help you understand your options and you will then be able to make an informed decision on how you want to proceed. Don’t waste a chance to save thousands. Be smart about how you use your refund and it will be worth much more to you. If you only receive $4,000.00 of tax refund, but can use it to settle $8,000.00 of debt, then you will have made the absolute best use of your money.
Using your tax refund to help combat your debt is a great way to help your financial situation. Paying off debt is the best investment you can make, because it relieves your stress and lets you focus on what’s important in life. Brackett and Strunk want to help you learn good financial habits so you can start to live off your savings instead of credit.
If you feel you have any questions about your financial situation, Brackett and Strunk are here to serve your financial needs. Brackett and Strunk offer a free consultation, so you can discuss your financial issues with a competent debt relief attorney. If you feel you need help with your unique financial situation, additional information about Brackett and Strunk can be found on their website: www.brackettandstrunk.com or by calling 865-688-0868.