Filing taxes can lead to past unclaimed returns, which can be used to pay off debt

By Angela Hawke on Mar 5th, 2010

One way consumers may be able to lower the amount of debt they have is by filing their taxes and getting a return.

However, the Internal Revenue Service reports that billions of dollars in tax returns went unclaimed in 2006 because people did not file returns. In all, 1.4 million people who did not file that year are missing out on a total of $1.3 billion.

"The IRS estimates that the median unclaimed refund for tax-year 2006 is $604," the agency said.

Some consumers may not have filed a return because they did not make enough money in order to be required to do so. Federal law allows people a three-year span to collect on past returns, and the last day that consumers may do this for 2006 is April 15, 2010.

If they do not do so, consumers will lose out on the money, which becomes the property of the U.S. Department of the Treasury.

Consumers who do bother to get their return, one thing they can use it for is to pay off debt. A recent report from TransUnion noted that average credit card debt declined 3.8 percent during the fourth quarter of last year when compared to the previous quarter.

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