Setting Priorities

Set Priorities

If there is not enough money to make payments on all loans, prioritize your debts. Debts you should pay first include mortgage or rent, utilities, secured loans (such as car loans), and insurance. Second priorities may include credit cards and debts to finance companies (if these are unsecured debts). Some examples of third priorities are doctor, dentist, and hospital bills. Family members and friends usually are willing to wait the longest.

If a creditor is threatening to garnish your wages (get a court order to have your employer pay a part of your salary directly to the creditor), you should pay something on that debt immediately. A loan company can repossess your vehicle, whereas the doctor cannot take back the service she or he rendered. If there is not enough money to pay both bills, pay the loan company first, so you can keep your automobile. Put the doctor's bills on hold temporarily, but notify the doctor of your plans and your intention to pay.