You Must Take Care Of Your
Most Important Debts First
As with any plan to get organized you need to
prioritize. Organizing your debts is no different.
You will need to prioritze your debt repayment so that you take
care of the most important debts first.
How do you determine which debts have priority?
Simple. The debts that can have the most deterimental
impact on your life now and in the future should be taken care
of first. Past due local, state, and federal taxes of all
kinds fit into this category. This is due to the
penalties and interest, as well as the ability of the IRS to
sieze your bank accounts and important physical assets such as
your home. The IRS and state agencies can really make
life very difficult for you.
The second item that you need to ensure is taken care of is
your mortgage. Losing your home can seriously impact your
ability to pay off your other debts that you have
outstanding. Losing your home can also make it extremely
difficult for you to find accomodations elsewhere. If you
don't own a home and you are renting, then be sure to pay your
rent and utilities in a timely manner. If these bills are
not up-to-date then do everything that you can to get them
current. Having a roof over your head will give you piece
of mind to handle all of your other debt problems.
A couple of other debts that you should be careful to pay
quickly are your medical bills and child-support payments.
These two bills can seriously impair your ability to work and
pay your other bills. In the case of negligent
child-support it could land you in jail, and being in jail will
not permit you to pay your other outstanding debts. So
try to avoid falling behind on child-support at all costs.
Another priority is your auto loan payment. Be sure to
keep your car payments up-to-date, because car finance
companies are quick to repossess your vehicle if you fail to
make your car payments. Losing your car can affect you in
so many ways that it is not worth it to risk losing your
vehicle.
If you do not have a budget already you
will need to create one. Your budget will give you a
clear indication of how much you owe. By analyzing your
budget you will be able to determine how to prioritize your
debts, and sort out payment plans with your creditors if
necessary.
Do not allow debt collectors to force you into paying low
priority debts at the expense of more important things.
You need to make sure that you have covered your most important
priorities before paying anything else.
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