Debt and Prioritizing Your Bills

Debt is a growing problem in today’s society and there is plenty of help available if you are willing to seek it out. The biggest problem most people have is they wait to long to look for assistance. If it ever gets to the point where you can’t pay all your bills, you should know how to prioritize your creditors.

Any mortgages you have and that includes home equity lines of credit, should come first. These loans are secured with you home and if these are not kept current your home could be foreclosed on. The farther into the foreclosure process that you get the more it is going to cost you to regain everything.

The best way to deal with this is to try to get your lender to work with you. It is not in the best interest of the lender to foreclose on your home. The lender also stands to lose a lot of money. Selling your home is a better option then letting it get taken away in a foreclosure proceeding.

Most people take care of their car next, because in most cases it is needed to get to work. Selling you car is a good idea if you have two in your family or if you have an alternate mode of transportation. The one problem you might encounter if decide to sell is owing more on the car than you can sell it for. In this case, you will have to come up with the difference in order for the lender to release the lien on the title.

You could also voluntarily surrender the car to the lender, but here again, if you owe more than it is worth, you will have to come up with the difference. A repossession, voluntary or otherwise, will impact your credit negatively.

You need your utilities so they are your next priority. Sometimes there are public assistance programs that will help you get these paid or reduced. There are also programs available for getting food.

The worst thing that can happen with most other types of debt is a negative listing on your credit report and collection attempts. However, garnishment and judgments are also possible.

The best thing you can do for yourself is to be open and honest with your creditors. You might be surprised at what they are willing to do to help you. You defaulting on anything is not in anybody's best interest.

Marjorie Salada is the owner of debtmanagement1.com, a website that contains information on debt consolidation, debt settlement, debt counseling and how to manage credit card debt.