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On Behalf of | Dec 20, 2019 | Firm News

In New Jersey and across the country, many people are gearing up for tax season. Are you expecting a substantial refund? Have you already begun thinking about how you will spend it? The average person can likely expect to receive several thousand dollars in tax refunds this year. There are numerous ways to use such monies, and some will simply tuck their refunds into savings accounts and forget about them.

Perhaps, you’re not one of them, however. It’s common for people to want to splurge when they receive large tax refunds. Maybe you’ll take a short vacation or make a down-payment on a new car. Then again, with consumer debt at an all-time high in the U.S., you might be leaning more toward the idea of using refunded tax monies to pay off debts.

Is it possible to start the new year off debt-free?

Many people in New Jersey and beyond say they are afraid to make a large purchase with a credit card because they worry their cards will be maxed out. In fact, approximately one in three consumers say they can relate to this feeling. You might be among those who are eagerly waiting for a tax refund to pay off a credit card balance or to pay down other debts.

Do you plan to invest?

Many people simply take their tax refunds and invest the money, even if they have existing debt. They might believe that investing is always a good choice because it increases the chances of acquiring more wealth. Not all investments are good investments, however. If you plan to invest, you’ll want to make sure you’re working alongside a financial adviser or someone else who is well-versed in such issues.

What if you can’t pay off all your debt?

Maybe you are in line for a layoff at work or have recently faced a medical issue that sparked a financial crisis. If the latter is true, you’d definitely not be alone in your struggle if you were to say that you’ve been using your credit card to pay medical bills. A lot of people do this.

The question is whether you have determined what type of options are available to help you overcome financial crisis. If you believe selling off some assets and cutting back on spending is all that’s needed to right the sails of your financial ship again, then that’s great. However, if your current financial problem has no end in sight, you might want to seek additional ideas for obtaining debt relief.

Bankruptcy is a valuable financial tool

There are definitely people in New Jersey and beyond who will not even entertain the idea of filing for bankruptcy. Others, however, have faced serious financial crises in the past and have learned that bankruptcy can often help obtain immediate debt relief, as well as help an individual or family reorganize their finances and payment structures to create an opportunity for restored financial stability down the line.