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!

Read the rest of this entry »