How to Get Rid of Student Loans or Tax Debts
- 1). Assemble your student loan and tax debt documents. If you're not sure what you owe, log onto the website for the National Student Loan Data System. Note your principal loans, outstanding interest and loan status. Private loans can be tracked down by contacting your lender or school directly. The Internal Revenue Service will have information about your tax debts. Create separate files for student loans and tax debts, with the debt amount, interest rate and current payment status clearly noted.
- 2). Call customer service representatives for your student loans and tax debts. Explain that you're trying to get rid of your debts and want to negotiate repayment rates. Lenders will sometimes reduce rates for having a good payment history or committing to automatic payments. Getting in contact with lenders or the IRS helps establish that you're acting in good faith and want to forge a positive working relationship.
- 3). Make aggressive payments toward student loan balances and tax debts. Remember, the reason many people take decades to pay off loans is that interest accumulates over long periods of time. Establish a set monthly payment rate and make additional payments whenever possible.
- 4). Hire a licensed tax relief agent to assist in your continued negotiations with the IRS if necessary. If you owe more than $10,000 in tax debt, you may be able to sign a partial payment installment agreement that permits you to pay less than the total amount owed. This helps get rid of tax debt faster. Some debtors may qualify for an "offer in compromise," in which the debtor offers to pay a specified amount back of the total tax debt owed. However, this is only accepted between 10 to 15 percent of the time.
