For more information, visit the IRS webpage Tax benefits for education: information center.Last week, I got an unpleasant surprise in the mail: an unexpected doctor’s bill for $150. Interest you pay on your student loan may be a tax deduction. If you have private students loans, contact the financial institution to learn your options. For more information on repaying student loans, visit Repay your loans, call Federal student aid at 1-80 or learn more about exit counseling guide for Federal student loan borrowers. But you can't qualify for a deferment once your student loan is in default. This means no payments are required during periods of unemployment or financial hardship. You may be able to have payments on federal student loans deferred. If you can't pay the total amount due, contact the IRS to request a monthly repayment schedule. If you owe unpaid income taxes, the IRS may seize your: Contact your county child support office for more information. If you don't get the order modified and fail to make child support payments, you are responsible for all unpaid support obligations plus interest. Orders are generally not reduced retroactively. If your income has dropped sharply, you may be able to get the order modified. For more suggestions, see Meeting your insurance needs: health insurance.įailure to pay a child support order can have serious consequences. This is especially important if someone in your family has an existing medical condition that requires care. If you can afford to pay the premium, continuing insurance is generally a good idea. If you lost your job and had medical insurance through your employer, you should receive a notice about continuing your coverage. If anyone in the family becomes ill, uninsured medical bills could be devastating. For more suggestions, see Meeting your insurance needs: automobile insurance.īe careful about letting medical insurance slide when money is tight. Minnesota law requires you to carry minimum car insurance. If you lease a vehicle, check your lease for penalties that result from default or early termination of your lease. Missing payments on a car or truck loan can result in repossession if the vehicle is the security for that loan. If you need a vehicle to keep or get a job, paying the car loan or lease payment may be a priority. For suggestions on what to do if you can't make your mortgage, rent, or utility payments, see Keeping a roof overhead. This will help you avoid losing your house or getting evicted. Keep up on your mortgage or rent payment unless you plan to move to less expensive housing. Usually, food, housing, utilities, transportation and medical care take priority. To help you answer these questions, see Setting spending priorities when income falls, Strategies for spending less, and Making the most of what you have. What debts could be satisfied by voluntarily surrendering, or giving back, the item?.What debts are the most important to repay first?.What assets do you have that could be used to pay off your debt (for example, savings and items that could be sold)?.How many creditors do you owe and what is the total amount you owe? Completing the worksheet How Much Do I Owe? (PDF) can help you to get a clearer picture of what and how much you owe.How much money is needed to cover your family's essential monthly living expenses?.How much income can you count on each month?.How long is your present financial situation likely to last?. Creditors are usually willing to work with you if you contact them before you get behind in your payments.īefore you talk to your creditors, take a look at your situation and decide how much and when you can pay each creditor. When your bills are more than you can pay, you need to contact the people to whom you owe money - your creditors - and explain your situation. Include your family in the decision-making process because their cooperation is essential to carry out the plans. The sooner you change, the more likely your financial problems can be lessened. When family income goes down, your spending habits must change. Instead, look for ways to cut spending until your situation improves. Unless your situation turns around quickly, it only puts you further behind and creates bigger problems. But taking on more debt is generally not a good idea. It may be tempting to use credit cards, take out a home equity loan, or borrow money to pay bills. When you don't have enough money to cover your family's basic living expenses and pay all your creditors, you face some difficult financial decisions.
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