Pay These Debts First

In a perfect world, we would all be able to pay off all our bills in full each time. However, there are many life events that may prevent us from being able to do this. When facing mounting debt, it’s important to create a plan. Which bills are the most important? Which bills will need to be paid in part or renegotiated?

ONE: Prioritize: We all need a roof over our heads, a job and food on the table. If you are facing foreclosure, then your number one bill to pay is your mortgage. If you rent, then pay your rent, in full, on time. Utilities are also important to “keep the lights on” the water flowing and the heat pumping. You will also need your transportation to keep your job and income, so be sure to pay your car loan to avoid repossession. 

• While no one wants to be in debt or have to deal with creditors, some bills such as credit card bills can wait (you will not go to jail if you do not pay these; you will only have a judgment against you). Student loans can often be deferred, and medical bills can often be paid on a monthly installment plan or can be wiped clean in a Chapter 7 bankruptcy. Depending on where you live and where you received your medical services, you may also be eligible to have your medical bills paid via a charity fund. Child support is required to be paid, but if your financial circumstances have changed dramatically, you may qualify for a modification. If you have a steady income and want to be able to pay down your bills, a Chapter 13 filing may be an option.

TWO: Eliminate high-interest debt first: Eliminate the debt that costs you the most money as soon as possible. Once you have high-interest debt off your plate, you decrease the amount you pay in finance charges.

THREE: Pay off the debts that you can: It feels good to pay off debts, as this gives you the momentum you need to continue forward. As you get rid of debts, you have more disposable income to pay off more debts or put aside for future use.

It can be difficult to sort through the “best” way to tackle or eliminate debt. Often speaking to a legal professional who has your best interest at heart is a good way to understand your rights and options.

I am attorney Rodd Richoux. As the principal attorney at Richoux Law Firm, I personally assist clients throughout the life of their bankruptcy case. I offer a free initial consultation so that you can discuss your unique financial situation and understand what’s available to you. For more information, call me at 337-205-7049 or send me an email.