Prioritizing Your Debt Payments

If youre in debt up to your eyeballs, or at least up to your waist, it can be hard to see which debts should be paid first. The creditor that screams the loudest may not be the best one to repay first.

Some debts should take precedence over others because they can have worse consequences. Here are bills you should pay off first:

Back Child Support Payments
If you dont pay child support, you could be found in contempt of court. That could land you in jail, have half your net wages garnished, and drivers and professional licenses revoked.

A lien could be placed on your property, tax refund intercepted, and your car could be booted, among other things you dont want.

Income Taxes
Owing the federal government money can leave you with high interest and fees, in addition to the original amount owed.

To resolve this, the feds may put a tax lien on your property”which will be listed on your credit reports”and they could seize your property and garnish wages. Money in retirement accounts and other bank accounts you have may be claimed, and your home or vehicle may be sold to pay the debt.

Car Title Loans
These loans use your vehicle as collateral, usually providing 30 days to repay the loan. They have high interest rates of 25 percent or more per month, equaling an annual rate of 300 percent.

Miss a payment and the lender can repossess the car. If you need your car to get to work, then getting the money for the loan will be that much harder.

The car may be sold at auction. You may also be required to pay the difference between what the car is sold for and how much is left on the loan.

Vehicle Payments
If you dont have a title loan but are financing your car with an auto loan, paying late or missing a payment or two could cause the vehicle to be repossessed. Youd have to make the payments, along with late fees, to get it back.

Mortgage Payments
Missing a mortgage payment is only behind missing a car payment because it takes longer to foreclose on a home than it does to repossess a car. A foreclosure takes an average of 19 months to process, giving you a longer span of time to work out the problem.

That can be enough time to pay the missed payments and late fees, or at least find another place to live. Your credit score will be extremely low, making it hard to rent or obtain another home loan.

Published with permission from RISMedia.

Back to Blog

Latest Posts

  • Selling Your Home: A Seasonal Guide for Smart Sellers

    Make the most of every season! sell your home now.

    Read more
  • Thanksgiving in America: Unraveling Myth and Reality

    Thanksgiving in America!

    Read more
  • 8 Home Improvement Projects That Add Value to Your Home

    When it comes to enhancing the value of your home, you don’t need to break the bank or get into huge debt. There are plenty of improvement projects that add value to your home. These can make a substantial difference within your budget! In this article, we’ll explore eight accessible and cost-effective home improvement ideas […]

    Read more
  • A Simplified Guide to Finance Your Home

    Through this article, you will find A Simplified Guide to Finance Your Home. Everything will be according to your special situation. Let’s find out together! Buying a home is a major milestone that many people aspire to achieve. However, navigating the process of homeownership can be overwhelming, especially when it comes to financing your new […]

    Read more
  • The Spooky Origins of Halloween: A Journey from All Hallows’ Eve to Home Sweet Home

    Hello, dear readers! As a dedicated real estate agent, I’m here to share a bit of Halloween magic with you today. While Halloween is mostly associated with spooky costumes, trick-or-treating, and haunted houses, there’s a fascinating history behind this beloved holiday that dates back centuries. Let’s take a journey into the origins of Halloween and […]

    Read more
  • 10 Items You Can Declutter Right Away

    Clutter is the bane of a well-curated home. Its all too easy to let unnecessary objects pile up in your home. These 10 items are so easy to say goodbye to, you wont believe you ever let them stay in your home in the first place. Expired Toiletries Makeup, lotions, and other toiletries can begin […]

    Read more
  • 3 Kinds of Subscription Boxes Your Family Needs

    When it comes to running your household, theres no doubt that nearly everyone could benefit from a helping hand at times. With all of the work involved to ensure that your day (and your familys) runs smoothly, theres no shortage of chores and planning involved. Make your tasks a little easier by using one of […]

    Read more
  • 3 Tips to Design a Meditation Space at Home

    Here are three tips for designing a meditation area at home. Pick the Right Location All it really takes is a small room or quiet alcove, however, if you have a tranquil view to help you settle into a relaxing mindset, thats certainly a bonus. Create a Zen-Like Atmosphere A simple cushion or mat where […]

    Read more

Join us

Edit Search

  • Email Updates
  • Only Update me On
Email Sent! Your email was sent successfully
  • Thank You For Registering

    Just a few more details so we can help you

    (All fields are required)

    When are you looking to purchase?
  • Thank You For Registering

    Just a few more details so we can help you

    (All fields are required)

    Need assistance with financing?
  • Thank You For Registering

    Just a few more details so we can help you

    (All fields are required)

    Need to also sell your property?