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Bankruptcy and Why You Shouldn’t Be Relying on Your Tax Refund

If you’re like many Americans, you’re looking forward to using your annual income tax refund to make a once-per-year payment on your debts. It’s always a positive step to pay down debt, but it’s a big mistake to treat your tax refund like some sort of “annual bonus.” Your tax refund is not a bonus; it’s money you’ve earned that the government has been holding on to over the year. So if you’re using your refund to pay bills — and believing that’s keeping your debts under control, you’re fooling yourself.

Change your allowances on your W-4 form

If you are receiving a hefty tax refund each year, it might be time to change your allowances on your W-4 form. This will lower the amount being withheld from your paycheck, thus eliminating the refund. You can adjust your W-4 at any time during the year at your workplace’s payroll office. You won’t be getting that big check every April, but at least you’ll be living throughout the year with a realistic picture of your finances.

How to stop relying on your tax refund every year

The fact that you have been relying on receiving a substantial tax refund every year is a sign that you could use some assistance in getting your financial life in order. Have you gotten into the habit of using your refund each year to try to make a dent in your debt? If your unpaid bills are piling up and you're beginning to lose sleep about how you will ever be able to pay them off it might be time for bankruptcy. Schedule a free consultation with a DebtStoppers bankruptcy attorney. We will help you figure out how to fix your problem quickly rather than taking years and years to pay down your debt. Bankruptcy isn’t the best option for everyone, but sitting down with a lawyer and finding out what your options are will help you make the most informed decision.

There are a few options available for holding on to your tax refund while you are going through a bankruptcy, depending on which chapter you are filing and your jurisdiction. You can discuss the specifics of your situation with an experienced bankruptcy attorney who can advise you on how you can hold on to your refund, and make a solid plan for solving your financial challenges.

If you have questions about bankruptcy and how it could impact your life, contact DebtStoppers to schedule your free personal debt evaluation with one of our experienced bankruptcy attorneys today.

 

 

 

 

 

 

 

 

 

 

 

 

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