Getting a tax debt loan helps you avoid the terrible actions that the government could do to you when you don’t pay your taxes. In this blog, we discuss the benefits of getting a tax debt loan.
Despite the fact that tax season is advertised and is known to everyone, when taxes are due—they still come as a shock to those who are unprepared for it. That’s why pretty shocking things could happen to people who don’t file and pay their taxes on time. While the government has helpful measures to ensure timely payment of taxes, still—with the busy schedule, or by unintentional omission, many tax payers let the deadline come and go without settling their tax dues. So, if you want to go scratch-free, take a look at these benefits of getting a tax debt loan, on time:
Avoid paying the general interest charge
When you miss your tax due date, the government will automatically add the general interest charge to the amount you owe. The debt will grow overtime, and on a compounding basis which will be added to your account. The power of compounding when applied to your tax debt could destroy your finances, especially when you let it for a few more quarters. The tax debt will grow at a steady rate, and the amount will increase exponentially.
Why spend money on tax debt interests when you can settle the debt now and use the money elsewhere? There are many useful ways to use the money which would have been otherwise used to pay for the interest –like starting or increasing your emergency fund or injecting it back into your working capital.
You don’t have to receive Garnishee notices
When you don’t pay your tax debt, the Australian Tax office may issue a garnishee notice to a company or individual who has control over your money—either in the present or in the future. For example, if you have a contractor, ATO may issue a garnishee notice to the said contractor ordering them to pay your money directly to them to reduce your tax debt. You will receive a notice informing you that ATO has already accessed your future income with your contractor or people who owe any money to you, or your bank or any financial institution that holds your money.
You will not receive summons or receive a notice that ATO has filed a claim against you with the court in your territory
When you fail to file and pay your taxes, the court may release a judgment against you when it has recognizes that you owe a debt, and the ATO can execute on the judgement debt. You may also have to pay a judgment debt interest. While a summon is something that you can stand up against, especially if you have a good lawyer, still—it is important to recognize the emotional effects of receiving legal notices, especially if you are also facing a financial crisis.
When you struggle to pay off your tax debts and other financial obligations anxious feelings can arise. So, don’t burden yourself with constant worry about the tax money, and feelings of being overwhelmed with debts. No matter how big your tax debt is—your health is more important than that. Get a tax debt loan to settle the amount you owe from the ATO and get over the debt stress.
You don’t have to go bankrupt
The Australian Tax Office issues a bankruptcy notice to those with outstanding tax debts informing them that that have to pay the debt within 21 days upon receipt. Or, they have to make a payment plan. Otherwise, the tax office may file a bankruptcy petition against them in court,
So, when you receive a notice, you have two options—make a payment plan that would cover your tax debts, stating the amount that you can pay each month. Probably, you can look for available tax debt loans in your area to pay off the entire debt. Or, you can just wait for the bankruptcy proceedings to commence and provide clear evidence that you have the ability to repay your debts. Otherwise, you will be declared bankrupt and while it is good for your debts—it won’t look good on your credit report.
When you have been legally declared as bankrupt—meaning you cannot pay your debts, almost all your assets will be placed with a bankruptcy trustee. Those assets would later on be sold in order to pay your debts. If that happens—what will happen to your business? Unless you intend to close shop anytime soon, being declared bankrupt is not good for your business at all!
Your company will not be declared insolvent
The court may order for your company to be wound up when you cannot pay you tax debts. The court will appoint an official liquidator who will sell your assets and distribute the money to the Tax office and to your other creditors. While this process could help you pay off all your debts, it also means that your company is insolvent and that there could be risks to potential creditors that you may not be able to repay them. So, pay your tax dues by getting a tax debt loan so you can still continue doing business as usual!
If you are considering getting a loan after discovering the tax debt loan benefits, then speak to our team today. ALC Commercial are experts with over 30 years experience in the finance industry. We can help to provide you with tax debt loans and other forms of finance to help you and your business.