Debts to Pay Before Credit Cards

In many of the previous articles I spoke on the many ways to remedy credit card debt effectively. It is also important to know what debts should take priority in terms of repayment prior to credit card repayment. Figuring out which debts to pay first can often be a very difficult question, as many creditors may be very proactive in collection procedures. A consumer might not receive as much attention with a late mortgage or car payment. Lets begin to take a look at the debts that need to be addressed prior to the credit card bills.

•Family Necessities – Food, essential medical expenses.

•Housing Related Bills – Mortgage payment, real estate taxes, insurance rent.

•Utilities – Con Ed, gas, oil, and electric bills.

•Car Payments – This is especially important if the car is the only method of getting to one’s place of employment. This would also include car insurance.

•Child Support – (if applicable) Non-payment can result in imprisonment.

•Income Tax Debt – Not paying could cause loss of refund or garnishment.

•Court Judgments – If a judgment has been ordered, it may be wise to make payment a priority, as the risk of seized property or wage garnishment could exist.

•Student Loans – Failure to pay could result in loss of tax refunds. I person may qualify for deferment or forbearance.

•Non-collateral loans – These accounts take on a lesser priority. Credit card debt, debt owed to professionals, open merchant accounts. Accounts still will go to collection agency for non-payment.

Secured debts should be first on the list to be paid. This is because the creditor can take the collateral used to satisfy the outstanding debt. (i.e. car, home.) Priority lists can be made for individual circumstances and situations. Obviously, every consumer's situation is unique but this information to be used as a general guideline to formulate the beginning of a debt repayment plan.