Please Help? What do I pay first?

iVillage Member
Registered: 07-08-2008
Please Help? What do I pay first?
10
Tue, 07-08-2008 - 9:43pm

Hi,


What should I pay first...........student loans that are all behind.......bad ,,,,,,in collections, or state taxes overdue since 2003 or federal taxes owed since 2005?

iVillage Member
Registered: 11-17-2007
Wed, 07-09-2008 - 2:56am

Welcome to the board


No the kids will not have to pay. But if you own a house or have money in the bank I would think that who ever you owe will come into the estate for as much as they can get out of it.


I think

iVillage Member
Registered: 05-09-2005
Wed, 07-09-2008 - 2:56am
Hi,
Well without any idea of amounts you owe, my first thought would be to find a way to get rid of the IRS. Call them, or go into one of their offices, and see how you could set up some kind of payment plan. Also, maybe you should have someone (tax professional) go over your 2005 taxes to make sure you owe for them. Did you just not file, or did you file and then no pay additional taxes you owed? I know there are companies that advertise that they will negotiate with the IRS on your behalf but, if you don't owe a huge amount, you probably can just set up a payment schedule. Is it just 2005, or 2005, 06 and 07? If you didn't ever file, maybe you don't really owe very much. First thing is to get all the tax forms filled out -- then I'd move on to the State taxes.
I know from experience that taxes hanging over your head can be really unnerving. You need to find out exactly what you really owe. With knowledge is power -- really.
Good luck with this.
Megan
iVillage Member
Registered: 04-12-2007
Wed, 07-09-2008 - 7:19am

I agree with the others - tackle the taxes first, then student loans and then collection accounts.


GL,


Robyn


iVillage Member
Registered: 03-20-2008
Wed, 07-09-2008 - 12:21pm

Hi Betsy~


I would tackle the taxes first. I am not sure what state you live in, but here in California they are very aggressive when it comes to collecting past due taxes. The IRS is actually very easy to work with, as long as you communicate with them. I know this from past experience,

Avatar for earnhardt_jr_fan
iVillage Member
Registered: 03-25-2003
Wed, 07-09-2008 - 12:29pm

I think I would call the IRS and see if you can work out a re-payment plan with them first. Next, I would address the state taxes. We were behind on our state taxes a few years ago and they are just plain nasty when it comes to getting their money (they garnished all but $150 of our checks!). It was awful, so in some ways I think the states are worse than the feds!


Photobucket
iVillage Member
Registered: 12-12-2004
Thu, 07-10-2008 - 12:02pm
Hi, Betsy--I agree, go to work on the taxes first.
iVillage Member
Registered: 07-08-2008
Sat, 07-12-2008 - 12:06pm

Thank you all for the advise.

iVillage Member
Registered: 05-09-2005
Sat, 07-12-2008 - 2:21pm

Hi,
Great with getting the taxes under control. That is a huge step. Now on to the student loans. I'd contact the original lender first, not the collector, and see where exactly you stand with them. If you haven't consolidated the loans to a low interest rate, that is something you should check into.

If you die, your student loans are forgiven.

If you could get a low interest credit card for 1 year, you could transfer the amount of student loan debt that you think you would be able to pay in one year, to the credit card.
That might bring your loans into a current status.

You could go back to school at least 1/2 time and put the loans back into deferment.

You are doing great. You are on a roll with this stuff. Congratulations!
Megan

iVillage Member
Registered: 02-01-2008
Sun, 07-13-2008 - 2:37pm
I wouldn't consolidate the student loans unless you consolidate them into another student loan. The interest on student loans is tax deductible and you would lose that benefit if you put them on a low interest credit card.
Mary Jo

iVillage Member
Registered: 02-01-2008
Sun, 07-13-2008 - 2:45pm

On second thought, moving a portion of the student loan debt to a low interest credit card to get them out of collection might not be a bad idea. But can you qualify for a low interest card with loans in collection? Did you try asking the student loan lenders for an extended period of time to pay them off? I've heard of people having 20 or 30 years to pay back student loans after consolidating them into a single student loan. Once you get everything under control you can triple up on the payments and it won't take you that long to pay them off.

Mary Jo