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Wednesday, August 15, 2018
What To Do About The Government?

Time to really handle this whole tax situation and effed up predicament that I find myself in.  Get caught up on with my crazy situation before reading the rest of this post.  So, I think that I have a couple of solutions available to me.  Check them out below.

  1. I can probably get a loan from Prosper.com for the entire amount that I supposedly owe, pay the government off and then wait for them to do a review and send me a refund check.  At this point I’m considering it because I really want to get THE MAN off my back.
  2. The other option that I have is to get a personal loan from a bank, if I qualify.  I would have said sure, I qualify before, but now that my credit score has tanked like the economy because of this crap, I’m not so sure.
  3. The last option is to get the money from the HELOC.  I think that I’d consider this to be the LAST option even though the interest on my HELOC is a low 3.125% and I’d have a long time to pay it off, the thought of tacking that debt on to the house just doesn’t seem like it’s a smart thing to do.  Remember all the trouble that people got into by using their homes as piggy banks and using lines of credit to finance cars and such?  Yes, well, I don’t want to be one of those people.

The thing is, I know that the Prosper loan will cost me some serious cash above the loan origination fee since the interest rate will be high.  What to do, what to do?  Oh, I know.  YOU decide.  Can you help me choose what I should do?  Choose option 1, 2, or 3 and leave it in the comments below.  I’ll do what you tell me to do.

And please don’t tell me to deliver pizzas and such as night.  I get home after 8 pm and I really don’t have time to do it.  I’d consider a weekend gig if I could find one near my home.  Come on people, tell me what to do!

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This messy little blog was all my doing. I started this blog four years ago as a way of keeping myself accountable to my own debt reduction plans. Now I'm using this blog to help others get out of debt as well. Consider subscribing to get more delicious posts like this at least twice per week.

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Evan October 19, 2010 at 2:18 pm

I would do the math between the prosper loan and the HELOC and determine if the difference is worth knowing that the extra debt is not on your home.

Frugalapolis October 19, 2010 at 2:26 pm

I had this happen to me years ago and I can understand how you want this settled and behind you. I didn’t pay taxes one year and they notified me several years later with those high fines and interest, essentially doubling the debt.

I would take out the HELOC and pay off the taxman to stop the madness from growing. Then pay yourself back, cut back on other expenses, down grade your cell phone, internet and TV services, etc and pay the HELOC off.

Good luck.

    Sandy October 19, 2010 at 3:04 pm

    My cell phone bill is bare bones at $30 with taxes included. I have no home phone. I don’t pay for TV and if the neighbors would open their network, I wouldn’t pay for internet either. 🙂 But yes, there are some places where I can trim the fat a bit more.

retireby40 October 19, 2010 at 4:48 pm

I don’t have any good advice, but just want to drop a word of encouragement! Keep your head up, you’ll work through it!

Little House October 19, 2010 at 7:20 pm

I’m not a home owner (or financial planner), so I don’t think I’m qualified to give advice. However, I’ll give my 2-cents anyway. I’d compare the Prosper loan to the HELOC and decide which has the lowest interest rates and the most affordable payments. If you can resolve your tax issues, then you can pay back the loan quicker than anticipated. Good luck!

JoeTaxpayer October 19, 2010 at 9:06 pm

I know there’s a “feeling” about the HELOC, but it’s probably the right thing to do. Budget, cut back elsewhere, and pay it off fast as you can.

Think about it. Would you rather I borrow against my HELOC at 2.5% but lend to you thru Prosper at 12%? Silly, right?

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