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Six Things To Know About Which Debts to Prioritize

Deciding which debts to pay first is a personal decision that is different for many people in different circumstances, but a consumer debtor should know about which debts are priority and should be paid off to minimize future complications and issues. For instance, by spending what money you have on the essential expenses, you have a legitimate and plausible excuse that will convince a creditor that you will pay when you can, and so it need not go to the expense of hiring a collection agency.

  1. Always pay high priority debt, such as mortgage payments, over low priority debt such as credit card expenses.
  2. Always pay family necessities first including food and unavoidable medical expenses.
  3. Try to pay housing-related bills including rent, home and real estate taxes, and insurance.
  4. Pay the minimum required to keep essential utility service.
  5. Child Support payments must be paid and cannot be waived in any way.
  6. You must still file your federal income tax return and pay any taxes.
Categories: Advice
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