Prioritizing your Debt in Tough Times
Published On May 12th, 2008

Life happens, and sometimes in life people fall behind on their bills. When a person starts having money troubles, it can be difficult to determine just what bills should get paid first, and which ones can wait. There are however, some bills that are more important than others, and these should of course be paid first. When financial problems hit, it’s time to determine what is a priority and what is not.

The most important bill to pay is your mortgage payment. Falling behind on your mortgage payment can have a negative impact on you for a long time to come. Even if you have another place that you can go to live and are not that worried about loosing your home, you still need to make that mortgage payment! Having financial difficulties is stressful enough without worrying about where you are going to sleep that night. This is even more important if you have children. No matter what else happens, finding a way to pay your mortgage and keeping your home should be your very first priority.

Once you have your mortgage paid, food should be your next priority.  So while you may think you can’t live without that cell phone, you actually can. But you cannot survive without food. That is not to say you should run out and spend a small fortune buying up Filet Mignon & Champagne, but you should make certain that once your mortgage is paid, the next priority on your list is a trip to the grocery store.

Of course, the average person has a great many other bills to pay as well. Telephone bills, electric bills, credit card bills and various other utilities are all a common part of modern day life. At this point, you really must evaluate your situation and determine what is an absolute necessity and what can go. While it may be a little uncomfortable, people can survive without cable tv, telephones and electricity. Bills such as cable tv, Internet service (unless you must use it for a source of income) and other general novelty items should be the first to go. These items are not necessary for survival, and paying for them takes away from other things that are more important.  It is important you pay the bills you have ON TIME and anything that cannot be paid on time should be downgraded or gotten rid of all together.  The main reason behind this is so you can have as many options available to you to restructure & reposition your debt, which often requires good credit scores.  Once you start having late payments and credit issues, your options are severely limited.

If you own a vehicle that you must make payments on, you should determine whether it is in your best interest to keep the vehicle or try and sell it or return it to the company. If you absolutely must have your vehicle for transportation to work, paying your vehicle note should also be a top priority to you as well. If you loose your vehicle and cannot get to your job, you will have no way to make money to get yourself back on your feet. However, if you live in an area with easily accessible public transportation, it may be in your best interest to get rid of your vehicle until you are in a better financial situation.

As I always say, if you see financial issues on the horizon it is very important to position yourself for the future by getting a plan together BEFORE disaster strikes.  Once you are in a situation where your payments are behind and your credit has taken a hit, it is difficult to qualify for many of the programs available to help you.

Contact me today for a free, no-obligation debt melt down analysis by clicking here or calling my office at 1-888-456-5635.

Your friend,

Robert Weinberg

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