Advancing To Get Out From Behind
Steve has HUGE IRS debt, and he's asking a question about paying it off that most people don't want to think about.
QUESTION: Steve has some $52,000 in IRS debt and wonders if he should get cash advances on his credit cards to pay that. His income has gone from $150,000 to about $60,000.
ANSWER: If you can live on $60,000, then when your income goes back up, you can pay this off quickly. Before I’d resort to credit cards, I’d just go to the bank and ask for a line of credit. Even if they only approve you for $20,000, that’s that much less you have to have from the plastic snakes.
The bottom line is who would I rather owe … the credit cards or the IRS? My answer is the credit cards for a lot of reasons. They actually have to perform according to law, and the IRS has no boundaries. Second, they are cheaper. Third, in an absolutely bizarre worst-case scenario, the credit cards are bankruptable. I would attempt to get some of that money more quickly and more stable than the credit cards are going to offer you.
Put your debt on aggressive payments and get it paid off.