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There are many different kinds of debt and you never want any of them held over your head. But if you have the IRS after you because of tax debt, it’s one of the worst kinds of debt to have. You need to pay what you own to the government–and fast. The good news is there are debt relief options that can help you. Here are a few to consider.

Consolidation Loans

If you have a few years of back taxes to pay, there are consolidation loan options that can give you the debt relief you want and need. Just like if you have credit cards you wanted to consolidate under one loan, you can take out a personal loan to give you the money you need to pay off the back taxes you owe. That would satisfy the IRS and give you one payment to make on the personal loan. You would likely have to pay less on a monthly basis with a smaller interest rate. Plus, you have a definite end date to the loan. You know when you will be out of debt. You can take out these personal loans for any reason and use the money for anything you want once you get it. One good reason is to get yourself out of tax holes.

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Home Equity Options

If you have lived in your home for a long time and have been good about paying the mortgage on a regular basis, you might be interested in using the equity you have built up in your home for your tax debt relief. In these cases, you can go to the bank and basically refinance your home. You get the equity you have in your home out as cash and you pay off the back taxes. Then, you continue to pay your mortgage, like usual, on a monthly basis.

Depending on the terms you worked out with the bank, perhaps you will pay on your mortgage for longer because of the equity you took out. Or, you might pay more each month, if you are able, in order to get equity built back up in the home to use on another occasion. This option is a good one to use if you have immediate tax needs and a home to use for just such occasions.

Bankruptcy Protection

There is really no reason to suffer from your large debt of any kind because there are avenues to take with anything. If your debt is too large for you to cover with consolidation loans or home equity options, you might have to file for bankruptcy protection to free up enough cash to cover your tax bill. It’s important to note, taxes cannot be discharged on the bankruptcy court, however, you might be able to discharge other debts and use the resulting liquidity to cover your tax bill.

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That process can take up to six months to process and it can be a pain to dig yourself back out of the bad credit you will have after. But if you really can’t find a way to pay for your back taxes, it might be the only way you have to get debt relief so you can clear things off and head into the future with a clean slate.

When you are trying to figure out what you need to do with any type of debt, it’s always a good idea to consult a credit counselor. Tell them not only what you owe, but also what you can afford to pay on a monthly basis. They can advise you as to whether or not a personal loan or possibly an equity loan will be your best play. They can walk you through the steps of filing for bankruptcy, ensuring that you know everything that comes with that option as well.

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