Tax Refund anticipation Loan

There is much to say at this time of year regarding tax returns. One thing that comes up, is that many of my clients take refund anticipation loans to get their refund sooner. I’ve seen several commercials now on TV hyping these loans from Tax Preparers.

This is something I tell each and every client not to do.

Several issues:
1. Have you seen the crazy interest rates they charge? They are huge! 300-400% or more! This is hundreds of dollars to get your money a few weeks sooner, is that smart?
2 They don’t come too much faster than you would get your tax refund if you file electronically, and get direct deposit.
3. These refund anticipation loans are just that, loans. If there is a seize order out there for child support, judgments, student loans etc, the loan company will come calling, since they didn’t get the refund as agreed upon when you take these loans.
4. If you wind up owing this company, it might not be dischargeable in bankruptcy on several challenges: a) too recent, or b) false information in the loan application (otherwise the company may have denied the request originally)

So, file your taxes. File them electronically, and request the IRS direct deposit them into your bank account. They even offer debit cards too.

Talk to your bankruptcy lawyer about how to protect the tax refund if you are looking to file bankruptcy.

If you are in Illinois, you can contact me at or call me at 312-427-7400, or view my website at

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Terrance Leeders

Chicago Bankruptcy Attorney, husband, father, Cubs fan.

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