5 things you can do to protect your financial future | on your debt

Over the years, we have helped tens of thousands of people in Alabama and Mississippi break out of overwhelming debt. Why and how our help was needed is unique to each client. However, there are a few things that we’ve found to be common in many cases. If you find yourself caught in one or more of these situations, don’t hesitate to call our experienced debt relief attorneys for a completely free and candid conversation about ending your debt.

Avoid your tax return

Even if you cannot pay your income taxes, you should always file your tax return. This may sound crazy, like just asking Uncle Sam to come after you, but it’s the best approach. Why? If you don’t file a tax return, the IRS will file one for you and they won’t do a good job. They look at the income reported to them and only give you the standard deduction. This is known as a replacement declaration and results in the highest possible income tax assessment for your income scenario. Always file your tax return, even if you can’t pay, so the collection statute of limitations starts ticking

Coming out of retirement to pay bills

Most consumers are not saving enough for their retirement and underestimate the amount of money they will need to live out their golden years. Also, as Americans, we stay in debt longer as we age, which means our retirement funds are being used not only to support a living, but also to service debt and pay interest. It’s not wise to withdraw money from your retirement account to pay off debt — don’t do it. Also, try not to borrow against these funds. And make sure you’re actively investing in either a 401(k), IRA, Roth IRA, or other investment vehicle for your future retirement every paycheck.

Carrying balances on your credit cards

Ideally, you should never swipe your credit card for anything you couldn’t afford with cash. If you buy an item with a credit card and don’t pay for it in full that month, it’s like taking out a high-interest loan. That’s not a smart way to buy a TV, outfit, vacation, or computer — you’ll end up paying a lot more in the long run. Better save the money and buy when you can afford it. Using credit cards minimally and then paying them off in full every month will give you the best possible credit score. Borrowing is one of the worst habits you can engage in and it can ruin your finances.

Withdrawing cash advances from your credit cards

Ordinary interest on credit cards is bad enough, but when you take a cash advance, your card issuer usually charges a much higher interest rate on that amount. Card issuers also often send “comfort checks,” which you can write like bank drafts. You can write it to yourself and put it into your own bank account, pay someone else to pay off a personal debt, or for any other reason. Convenience checks are also a cash advance and lead to higher interest charges. Shred those checks so you don’t get tempted and never take a cash advance.

ignore creditors

You should never ignore calls or letters from a creditor or collection agency when you are behind on your debt. However, you have to take the things they say with a grain of salt. You should educate yourself about what creditors and collection agencies can and cannot do. Visit the Consumer Financial Protection Bureau’s website and look for debt collection information.

The guidance you need

Bond & Botes lawyers have the experience and will give you the guidance you need to get out of the above traps. Let us solve your financial problems. There is no obligation, and that means no disadvantage in gathering the information you need to make good decisions about how to break the cycle of debt stress and move forward. We can answer all your questions about chapter 7 bankruptcy, chapter 13 bankruptcy, ending a foreclosure or wage garnishment, avoiding liens, ending court proceedings, paying off medical debt, personal loans, payday loans, credit card debt, etc . We can relieve your stress! We want to help and we can help you!


Bond, Botes, Sykstus, Tanner & McNutt, PC

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