The current US personal debt, including mortgages, has reached $14 trillion, with a total annual income of $19.68 trillion. That works out to a median household yearly income of $79,900 with total debt of $145,000. So is there a magic formula for paying off debt? The answer is yes, but how each household approaches this will vary, depending on the details of their interest rates, duration of loans, income, other expenses, opportunities for relief, credit available, and level of debt.
As soon as the IRS contacts you about unpaid taxes, acting quickly can save you a lot of money and help avoid tax liens and levies. Unfortunately, life issues can get in the way of handling back taxes promptly. For example, suppose you haven’t acted upon notification from the IRS regarding unpaid tax liabilities. In that case, you should expect to receive notification from them placing a lien or a levy on your assets. When that happens, you have no time to lose. You must act immediately to prevent that escalation by the IRS because the financial ramifications of either action can be devastating.
There’s no question that the pandemic has affected the finances of many people. Going through possible job loss or reduction in business productivity has made paying bills on time a challenge. Even with government interventions for rent and payroll assistance, it’s likely that the credit scores of many people took a hit this year.