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Tips for Managing Debt and back taxes

Tips for Managing Debt

Repaying your debt1 can often feel challenging. That’s why making a plan to manage your payments and balances can help. Take a look at these tips and discover some small steps you can take today that may make managing your debt easier.

Always pay on time

Payment history makes up 35% of your credit score2. If you’ve missed a payment, pay as soon possible — it makes a difference. Credit reports will track if you are 30, 60, or 90 days late on payments.


Monitor your credit regularly

Review your credit reports regularly to make sure they are accurate, and to look for areas where you can improve. Order yours free at Credit Close-Up® offers eligible Wells Fargo Online® customers complimentary access to their FICO® Score3. Don’t worry, requesting your score or reports in these ways won’t affect your credit score.


Pay more than the minimum

Always try to pay more than what’s due. This helps to pay down debt faster, save on interest expense and may improve your credit score.


Know your limits

Being close to or maxing out your credit limits may negatively impact your credit score. It’s a good idea to keep your balance on revolving lines under 30% of your limit.


Know your debt-to-income (DTI) ratio

Lenders look at the amount of debt you have compared to your monthly income when extending new credit, so it’s a good idea to keep your DTI ratio under 35%.


Take on new debt only when needed

Apply for and open new credit accounts only if you need them. Having too many accounts with balances may lower your credit score and may become difficult to manage.


Qualify for lower rates

See if you qualify for lower rates on your current debts, especially if your credit has improved or if interest rates have dropped since you originally applied. Wells Fargo customers can use the Check my rate tool to get rate and payment estimates, with no negative impact to their credit score.


Think before closing accounts

Closing credit card accounts may lower your available credit and could hurt your credit score in the short term. Consider keeping accounts open if they have a good payment history and a low or zero balance.


Build an emergency fund

Having funds set aside in a savings account may help you to avoid using credit cards for unexpected expenses.


Why Choose Nonprofit Credit Counseling?

At the NFCC, we understand that housing stability goes hand in hand with financial education and debt management. Our nonprofit credit counseling services offer a holistic approach to empower consumers with the knowledge and tools they need to prevent eviction or foreclosure. Unlike for-profit credit counseling services, our primary mission is to serve you and your best interests.

Access to Impactful Approaches

Thanks to the invaluable support from partners like the Wells Fargo Foundation and our extensive network of nonprofit Member Agencies, the NFCC can provide more people with impactful approaches to debt reduction and improved credit standing. Our team of certified credit counselors is ready to work with you one-on-one to develop personalized financial strategies tailored to your unique circumstances.

Addressing Unsecured Debt: How We Help Renters

Personalized Budgeting:

Our expert credit counselors will review your income, expenses, and debts to create a customized budgeting plan that aligns with your financial goals and helps you save for your future.

Housing Counseling:

Our specialized housing counseling services are designed to address the unique challenges faced by renters. From rental assistance programs to landlord negotiations, we’re here to support you every step of the way.

Financial Education & Security:

Knowledge is power. Through our financial education resources and workshops, you’ll gain a deeper understanding of credit management, savings strategies, and more.

Debt Management:

Struggling with overwhelming debt? We can negotiate with your creditors to lower interest rates and consolidate debts into a single, manageable monthly payment.



 Need help? 

Contact the National Foundation for Credit Counseling (NFCC) in person, online, or by phone for in-depth, personalized financial counseling and education.


Struggling to Pay Rent? Contact NFCC Today

Managing housing costs can be overwhelming, particularly when you’re dealing with financial struggles. Still, it’s possible to manage your housing expenses with careful consideration and budgeting. If you’re struggling to make ends meet, reach out to the National Foundation for Credit Counseling (NFCC).

As a non-profit credit counseling organization, the NFCC offers financial guidance to renters and homeowners who are struggling to manage housing costs and maintain their credit scores. Home insecurity is often the unintended consequence of an inability to pay mounting credit card debt, student loans, or medical debt. By tackling unsecured debt, you can be better positioned to avoid eviction. Call us today at (800) 388-2227 to get started.



Debt is real and it isn’t forever.

You have choices. Regain control of your finances and connect with a nonprofit, certified credit counselor.

 call 800-388-2227 for support.

If your unpaid liability is over $10,000, complete Form EG-13-I, Financial and Other Information Statement for Individuals, or Form EG-13-B, Financial and Other Information Statement for Businesses, and submit it with Form CPP-1. Both of these forms are available on our website at



Owe back taxes get relief

If you owe the Internal Revenue Service (also referred to as the IRS) money, and you can't pay, you have options. 

Don't avoid the problem

If you cannot pay your taxes, ignoring the problem will only make it worse. If you don’t pay your taxes you might end up owing:

  • The taxes due,

  • Interest on the taxes you owe, and

  • A penalty, or fine, for not paying on time.

The penalty for not paying on time is usually 0.5% of what you owe each month and is charged in addition to interest.

If you keep ignoring your tax bill, the IRS might try to get the money that you owe. The IRS might:

  • Take money from your bank accounts,

  • Garnish your wages, or

  • Place a tax lien against your property.

Read more information on penalties and interest charges on the IRS website.

Try to pay the amount owed

Whether you owe $100 or $10,000, the first thing you should do is try to find the money. Think about all the places you might be able to get the money that you owe:

  • Borrowing against your home

  • Taking money out of your savings 

  • Selling things you own that are valuable

  • Asking family and friends to help you

Paying now will save you money on interest and penalties.

Ask to be put in the "Currently Not Collectible" category

While you figure out what your next steps will be, you can ask the IRS to put you in a "Currently Not Collectible" status (CNC). When you are on CNC status, you still owe the taxes to the IRS, but they will not try to collect the amount due. This means that the IRS will not freeze your bank account or take away your car.

To be put into a CNC status, you will need to send a Form 433-A. This form lists all of your assets, income, expenses, and money you owe. It is used to prove to the IRS that you are not able to pay your taxes.

If you need help filling out Form 433-A, see Publication 1854.

If the IRS puts you into  CNC status, there are some important things you should know:

  1. Future tax refunds might be taken to pay the taxes you owe. 

  2. You will still be charged interest and penalties on the taxes you owe. 

  3. The IRS will send you a reminder notice of the amount you owe every year.

  4. If you are ever able to pay the taxes you owe, the IRS might ask you to make payments.

Consider an installment plan

The government would rather have some money than none at all. So the IRS has an installment plan available when you cannot pay in full.

If you can afford at least $25 per month, the IRS will likely agree to an installment agreement. Keep in mind you will still pay penalties and interest on the amount of taxes you have not paid. So you will end up paying more money in the long run.

The IRS charges a fee to set up your installment agreement. If your income is below a certain level, you can apply for a lower fee. To request the lower fee, use Form 13844. If certain conditions are met, the lower fee may be waived or reimbursed.

To request an installment plan, there are a few options:

  1. If you owe $50,000 or less, you can apply for an IRS installment agreement using the Web-based Online Payment Agreement (“OPA”) application on The OPA option gives you a simple and easy way to establish an installment agreement over the internet.

  2. You can also ask for an installment agreement by filing a Form 9465.

  3. You can simply make a request in writing.

  4. You can call the IRS at (800) 829-1040 to make your request.

For more complete information, visit the IRS website.

Consider an "Offer in Compromise"

An Offer in Compromise (“OIC”) is an agreement between you and the IRS. In an OIC, the IRS agrees to accept less money from you than you owe. The IRS will only accept an OIC when they believe they will never get the entire amount you owe, and the amount you offer is the most the IRS can expect to get from you. These offers may or may not be approved. Generally, if there is any way for a taxpayer to get the money to pay the tax they owe (for example, borrowing against their house or selling their car), the IRS may deny an OIC for that reason.

To file an Offer in Compromise, you must submit:

  1. An application fee.

If you request an Offer in Compromise, you can offer to make either a single payment or agree to an installment plan of smaller payments over a short period of time. For more information, see What is an "Offer in Compromise?".

Contact a Low-Income Taxpayer Clinic

If you are a low-income taxpayer, you may qualify for free or low-cost assistance from a Low Income Taxpayer Clinic (LITC). LITCs represent individuals whose income is below a certain level and need to resolve tax problems with the IRS, including tax collection disputes. LITCs can represent taxpayers in Tax Court, and before the IRS.

You can find the nearest LITC by using the “Find your local clinic” search tool at the bottom of LITC page at the Taxpayer Advocate LITC website or by calling 1-800-829-3676.




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