The Blog Of TL Wall Accounting


Archive for August, 2013

Let’s Talk Credit Counseling

Five months ago we touched upon the topic of problems paying bills. In that article we briefly mentioned Consumer Credit Counseling. That was because this is a free service, for the most part, that helps people set up payment arrangements to get rid of a lot of debt and takes a small percentage of it to help cover their costs so they can continue providing services for others.

They’re the best known but there are other companies that can help you with this same type of thing. Whereas accountants can help you set up a budget and help you manage your money, these companies have one specific goal, which is to help get you out of debt and keep you from adding onto it.

This is different than a debt consolidation company, and we might as well get them out of our way. There are some reputable debt consolidation companies, but the majority of them are frauds. They tell their customers that they’ll contact all of their creditors, and they do, but not until your credit report is ruined and you’ve gotten tired of all the phone calls. Within a year to 18 months after you’ve first reached out to them, that’s when they’ll call, make deals to pay your bills off at a discounted rate, and then keep a big percentage of it for themselves. But your credit will be wrecked for at least 7 years; no thanks to that!

With credit counselors, you may end up paying some of them but they’re going to get you out of trouble without your getting deeper into trouble. Some will call all of your qualified creditors and try to work out deals with them. Some will help you set up a payment plan to get out of debt. There are different degrees that each service will offer you, and you need to be ready to pay for whichever company you sign up with.

The reason everyone doesn’t end up with Consumer Credit Counseling is that you have to qualify for them to represent you. This means if you make enough money to pay your bills based on their scale they’ll let you know that but probably won’t work with you. That’s a good thing because it means you still have a chance to take care of things on your own.

In any case, if you start feeling the pressure when it comes to your bills you should talk to some kind of professional to help you out. It’s always better to know where you stand.

Working With The IRS On Tax Liabilities

Do you owe the IRS tax money? Is it kind of high? Are you scared and worried because you’re unsure how you’re going to pay them because you already have so many other bills?

You’re not alone, but here’s a reality. Most of us think of the IRS as this almighty bully looking to take us down. Like most governmental agencies though, they’re not really like that. As a matter of fact, the majority of people you talk to at the IRS are willing to work with you, no matter what your situation is, to help you pay your bills. That is, if you’ve at least filed your tax return, whether you actually paid them or not.

Of course your first step is to make sure everything’s correct. You should either run your taxes through an accountant, a tax service, or a tax attorney. On that last one, only go to an attorney if you think you’re going to owe $10,000 or more; otherwise it’s not really worth it.

You’ve probably received a letter in the mail from the IRS, registered or not, to get the process started. Your first step is to pick up the phone and call them. Have your courage ready; not that you necessarily need it but what happens sometimes is you could be on hold for longer than 30 minutes. Many people will find a way to talk themselves out of staying on the line and waiting for someone; that’s fear talking and you have to shut it out. If you call again, the process starts all over.

Once you get someone on the phone you’ll have to confirm the amount you owe. If you believe your balance should be different they will put a hold on your account of 14 to 30 days and do a full review. If you have any extra information for them they’ll ask you to send it to them.

If you know you actually owe the amount requested they’ll ask you if you want to set up a payment arrangement with them. If you have circumstances that make it hard for you to make big payments they’ll work with you on smaller payments.

The caveat here is twofold.

One, they’ll tell you that you have to make sure you pay all the taxes for the previous year so that you don’t have the same thing happen the next year. You might find that hard to do but try to keep up. They will work with you again, but they won’t tell you that initially. As long as your overall outstanding balance stays below $25,000, you’ll probably be okay as long as you prove you’re trying.

Two, you’ll continue building up interests and penalties. Both are actually much lower than any credit cards you’d ever have, but it’ll make them set up a payment so that you’re actually paying down the balance instead of allowing it to increase. Still, don’t make an agreement for an amount that you know you can’t pay; that’ll look bad on your record if you miss a later payment.

As with most things, the fear goes away when you make that first call. People do have jobs to do but most of them understand that people have financial struggles. It’s always better to face these types of things upfront.