Top ten payment priorities

When you have more bills than money to pay them, it can be really hard to decide what to pay and when. I’m Joe Jeppson consumer bankruptcy specialist, and I’m going to give you the top 10 priorities of debts that you should pay. So the first thing you should pay is court debt. So number one would be civil judgments. That would be a lawsuit. Someone filed against you for a debt. If you don’t pay that, they’re going to garnish your wages and you can lose up to 25% of your income. That’s going to make it harder to possible to pay the rest of the debts. So that’s where we’re going to start. Number two is criminal payments that would be for, traffic tickets and other, criminal justice related fees and penalties. If you don’t pay those, then you may lose your driver’s license or face other consequences that stop you from going to work.

You lose all your income. And at that point again, you’re unable to pay the rest of those debts. Next, we’ll look at car loans. Number three, because if you don’t have that car gets repossessed, then you’re not going to be able to get to work. You’ll lose all of your income. And that can happen after just a few short months, depending on your lender. So it’s important to stay current on that. Number four is rent again. After a couple of months, your landlord may be looking to evict you. Then you’re going to be either homeless or you’re going to be imposing on friends or family, or even worse. You’re going to be paying high rates at an extended stay hotel or having to move into a neighborhood that you just don’t want to be. So keeping your rent current is our number four priority. Number five is utilities so that you have water and electricity, heat, air conditioning, and all of those things that make life comfortable.

Number six is child support. Child support is important because there are serious consequences. They don’t hit as fast as some of the other, debts. We’ve been talking about a couple of months for rent and things like that. But if you fall far enough behind on child support, they can garnish your wages, take your, tax refunds or other federal benefits, and can even lead to incarceration, go to jail for not making the payment. Those are our top priorities. Our next priorities! Number seven is your mortgage payment. The mortgage takes longer to foreclose. Then rent is to evict. If you stop making payments on your mortgage, now you’re looking at least six months before you’re really facing the possibility of a foreclosure, but it’s going to be very hard to get it caught back up. So it’s important to stay current there. Next we’ll look at real estate tax, which can also result in a foreclosure, but generally that takes a couple of years, to reach foreclosure.

So it’s not nearly as time sensitive as the mortgage or some of the other debts. Number nine is student loans. Student loans can be easy to ignore, but if you do after nine months, they’re technically delinquent and can cost a lot of money in fees and penalties to bring those loans current. And until they are, they can start taking your tax refund and other federal benefits. Number 10 is income tax. It’s important to file your tax returns on time every year. Even if you owe money and you can’t afford to pay it, you want to send that return in on time without payment. There are ways to get rid of tax debt through bankruptcy and other ways. But if you don’t file the return, you can’t get rid of that debt because a certain amount of time has to pass before those options become available.

And eventually after a couple of years, if you’re not making your tax payments, they can start to garnish your check, seize your bank account, other federal benefits, and even sees other assets. So it was important to make those payments, but again, the consequences take longer to manifest. So it’s, one of our lowest priorities at number 10, the actual low priorities are general unsecured debts, medical bills, credit cards, paying back friends and family, private student loans, debts you’ve co-signed for somebody else, the deficiency, repossession, or other personal loans. All of these debts need to be paid at some point or need to be dealt with at some point. But until they become a lawsuit or a judgment, they’re pretty low priority because we don’t care that they want money from you or they are writing your name in a ledger. All we care about is what they’re going to do about it. And until they actually do something to make you pay, they remain a low priority. I’m Joe Jeppson, consumer bankruptcy attorney in Kansas City. Please give us a call. If you have any questions, we’ll be happy to give you a free consultation.