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Debt Management…Caring For The Most Important Debts…
February 19th, 2008 ·
Some debts are more important than others and that importance will be determined by your individual situation. You need to prioritize your debt repayment and ensure that the most important debts are taken care of first.
The importance of the debt is determined by the impact that it can have on your life both now and in the future. For instance, clearing past due taxes might be one of the first debts that you would want to look at due to the penalties and compounding interest. Any type of debt that has a ‘compunding’ element to it is one you will want to tkae a hard look at. Federal and state taxing authorities have so many powers to seize assets and make life very difficult for you creates an extremely stressful situation!
A mortgage is another debt that needs to take top priority as losing your house can impact on your ability to pay all your other debts and also make it difficult for you to find accommodation elsewhere. If you don’t have your own home then you need to ensure that your rent and utility bills are kept up-to-date so you have a roof over your head and are able to live in suitable conditions to be able to work your way through your money problems.
Your budget will give you a clear indication of the total amount of debt that is owing to others and from there you can set your priority list where you can start to sort out payment plans with your creditors
Medical bills and court-ordered child support debt are also high on the priority list as failure to pay these can result in drastic action being taken that will once again make it difficult for you to work your way through your other debts.
Car loan repayments are a priority because car finance companies will quickly repossess your car if you fall behind with the payments and this can impact on so many other areas of your life such as your ability to get to your place of employment.
Don’t be forced into paying minor debts at the hands of debt collectors if you haven’t covered these priority debts first. Remember, try to work directly with your creditors, or credit agencies in your local area, rather than debt collectors.
February 23rd, 2008 at 3:11 pm
[...] Debt Management Answers For You… wrote an interesting post today on Debt Management…Caring For The Most Important Debts…Here’s a quick excerptFederal and state taxing authorities have so many powers to seize assets and make life very difficult for you creates an extremely stressful situation!…For instance, clearing past due taxes might be one of the first debts that you would want to look at due to the penalties and compounding interest…. [...]