At this time of year, many families receive a tax refund. Many times, these refunds are used to catch up on credit bills. Other times people use their tax refund to take care of desperately needed household expenses. However, using your tax refund to file for bankruptcy can go much, much further.
If you spend $300 per month or more servicing your debts, your budget is already feeling the pain of a high debt load. At $300 per month, you are paying $3600 per year just to service your debts. The worst thing is that many times the total balance of your debts do not decrease. You essentially pay every month and receive little or nothing in return.
If you spend $500 per month, then you are paying $6,000 per year just to service your debts. Essentially, in the two above situations, you would likely lose the equivalent or more of your tax refund throughout the year. Of course, unless you use your tax refund proceeds to file for bankruptcy.
In the past, we have seen many of our clients use their tax refund to file for bankruptcy and reduce their housing or automobile expenses all at the same time. Bankruptcy usually only costs $975 or less on the attorney portion at our office. The remaining $2000-$3000 of many of our client’s tax refunds have been used to purchase a paid-in-full automobile. Other times, the remaining portion has been used to move into much more affordable housing. Tax refund time is the perfect time of the year to make major changes to your life that will reduce your monthly debt load.
If you have an impossibly high debt load, do not just keep running in an impossible race. Make this year’s tax refund go farther than any other refund. Use it to restructure your finances and declare for bankruptcy. It will reduce your monthly debt load. It will also reduce your stress to allow life to be enjoyable again.