Bankruptcy Law, Credit, Debt Relief, Timothy Kingcade Posts

What to Consider Before Paying Christmas Bills with a Tax Refund Loan

If you are planning on paying off your Christmas debt with your tax refund check, you may want to think again. The Internal Revenue Service (IRS) announced that some taxpayers will experience delays at the beginning of tax season in 2017 due to a new law that requires the IRS to hold refund checks until February 15th. There may also be delays due to weekends and the President’s Day holiday. As a result, the IRS cautions taxpayers not to count on their refund checks until the week of February 27th.

However, some taxpayers are planning to use tax Refund Anticipation Loans (RALs) or Refund Anticipation Checks (RACs) to tide them over between the holidays and tax season. If you are planning to do so, here are a few things to keep in mind:

  • Interest Rates: In most RAL agreements, the taxpayer agrees to repay the RAL at tax time, plus interest. Some states limit the amount of interest that a lender can charge, however, in some instances, the annual percentage rate (APR) of an RAL can exceed triple-digits.
  • Fees: In addition to high interest rates, RALs oftentimes come with hefty fees that can diminish the remainder of your refund check. According to the National Consumer Law Center, some add-on fees they observed in a 2013 report included application fees; data and document storage fees; document processing fees; e-filing fees; service bureau fees; transmission/software fees; and technology fees.
  • Uncertainty: Keep in mind that you have to repay the entire amount of the loan even if you receive less than you anticipated. This means that you have to estimate the amount you will receive back on your taxes when taking out a loan.


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If you are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia website at