I owe $70,000 in back taxes and my IRS account is currently in collections. I’m working with an accountant to setup a payment plan and am pleased with how it’s progressing. However, although I have always filed as married filing separately to keep my wife out of the picture, the IRS is sucking her in anyways.
So we’re trying to compile a list of all of her expenses. As it turns out, she’s been hiding her bills for years and doesn’t really know what they are. Also, a few creditors recently started threatening to take her to court. They seem serious.
Her dad suggested paying one bill at a time until all of them are paid off. Intuitively, I feel this is a bad idea. I thought it would make more sense to call every collector and get a sense of the big picture then figure out how much we can pay each of them. Either that or work with a debt consolidation service.
The IRS has given me a deadline of 8/8/09 to get our income and expense statements to them. What’s worse, my accountant has to leave town before then. I basically need to figure out what my wife is looking at within the next two weeks. Considering this timeline, what would you do?
Thanks so much for your time!
My wife has a lot of creditors. We want to pay them off. Should we try to work the numbers out ourselves or should we use a debt consolidation service?”
I think before we jump to the “what to do next” stage we need facts. Luckily getting the information will only take a few minutes. I would suggest that you get an online consolidated credit report immediately on your wife, with her permission. You will need to see what all three credit bureaus are reporting since not all creditors report to all bureaus. The credit report link is the same one I get for myself and love it because it is so easy to read.
Even a consolidated credit report may not include all debts. Small debts to local places like a health club or doctor office will not be reported. Basically, any business that elects to not report debts will not be on the credit report but you really are not worried about those. All the major creditors do participate with one or more credit bureaus.
Armed with the facts we can come up with a game plan. But deciding to pay this or that without knowing the facts would be a mistake. Get the scoop and then come back and update me in the comments section and let’s take it from there.
Of course, what we are doing here is reacting to the IRS situation and not focusing on the underlying issue that drove your wife to hide debt from you to begin with. You will still need to examine that issue together to autopsy why and how that happened to avoid repeating the same situation.
You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.
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