One thing that stood out from your post was that you are going to rely on a tax refund to pay off your loans to friends and then next year, pay off your loans to CC’s with your refund.
I know some people like to get a nice big check every spring, but it’s actually the equivalent to allowing the government to have more of your money than is required. Essentially, you are floating them a loan all year long.
From what I’ve read (I am no expert believe me ;-)) and I’m sure others would confirm, is that it would be better for you to have your refund money up front and working for you for 52 weeks out of the year. To get this done, you would adjust your withholding on your W-4.
Now you may thinking…”But, I might owe something at the end of the year.” Well, the IRS website has a tool to calculate the appropriate amount of withholdings you should adjust to so that you are as close to having no refund or charge at the end of the year.
Would anyone else confirm or agree in principle with this plan? I’m sure your friends and the creditors would rather have their money up front rather than after you have saved it up for a year by over paying your taxes.
The problem with this for us is that we get back double of what we pay in. We have lots of child tax deductions ;o) LOL
I do agree with you that we could have our money working for us all year long IF we were diligent enough to do that. My mother is an accountant. I’ve had her figure up all the different ways we could go about this. If we were to get back more through out the year it would only *work* if we put it directly into a savings. My dear husband would never let it get to the savings….he would order a pizza or something with the little extra we would get each week. Also, next time consider this better alternative to payday loans. Yes, I am talking about installment loans.
I know many people do this and I think it’s great. It just is better for us to get a lump sum at one time. Normally we don’t have problems keeping our finances on track and use the tax refund for big things we need. Pay our property taxes, car ins for the year, home owners stuff like that.
There is hope though. Remember to pay what you need to survive before feeding the wolves that are at the door. All the credit card company will do is call and harrass you, at least for a little while. And honestly, medical bills are less likely to sue or get nasty with you than credit card companies.
If I were in your shoes, I would try to settle the credit cards on my own and negotiate with the hospital for a low monthly payment. A garage or ebay sell of all the stuff that you don’t truly need to survive is a good place to start in digging out of the hole. We sold our boat, almost all of my nick-nacks, clothes we didn’t wear & books we had already read. We only made 600 bucks or so but getting rid of all the stuff, helped us focus more on what we were doing. A weekend or part time job for six months or so would really help as well.
I will be praying for you and your family. Let us know if you have any other questions. Posting your budget/income might help people better help you see what options you have.
From my own personal experience Capital One will put the settlement in writing IF you fax them an offer.
Just write down the terms you agreed to and fax for confirmation…. something like:
As per our conversation on (date) I am prepared to offer the following:
Please fax acceptance of this offer back ASAP so I can continue with this offer.
Please understand that this offer is not admitting to anything. This offer is only a “good faith” on my part to settle this long disputed debt.
Your FAX Number
As for Capital One sending a closed letter…. when “toothpicks” freeze over! I settled in December and they adjusted my balance to reflect a reduced balance even though I have a signed acceptance and a cancelled check. Without these 2 items I would not have a leg to stand on.
If you learn nothing else PLEASE learn to
GET IT IN WRITING!!!!
I am having a capitol One party with my husband this very moment!! Thank God thank God. After back and forth phone calls and faxes I just mailed a check- virtually our entire tax refund for 4900. The debt- 7100. PAID IN FULL! Maybe next year or the following that tax refund will go straight to my roth I will be starting. I cant even express how wonderful this feels. All over the envelope I wrote “goodbye capitol one’ ” goodbye Dana and Pariser law office” and “Freedom!” Next stop mbna- 2 accts- then the ‘hell’loan as Dave Ramsey says.
We have literally come back from the pit and have a very long way to go. I have made some overtures to mbna and will start faxing a hardship request- dh is still very much disabled and out of work following the 2 strokes and open heart surgery. But babysteps, babysteps.