Sacramento Bankruptcy Lawyer
What to Do Right Now: Prioritize and Protect Yourself
WHICH BILLS YOU SHOULD PAY FIRST
If you can’t afford to pay all your bills, you need to decide which bills you will pay. Choosing which bills to pay can make an enormous difference in your life, particularly if you would like to retain possession of things like your home and your car.
Here’s a list of the order in which you should normally pay your bills when there isn’t enough money to pay them all:
FAMILY NECESSITIES
The most important use for your limited supply of money is to provide the essentials for your family. By essentials, I mean food, housing, and medicine. If you don’t provide your family with these things, nothing else will matter. I recommend that you get into the habit of buying these things with your monthly income, not with credit, since using credit this month for the basic necessities means you will have twice the expenses next month.
SECURED DEBTS
The two most important secured debts most people have are their home mortgage and their car loan. Your house is collateral that secures your mortgage and your car is collateral securing your car loan.
If you get behind on your payments, your creditors can take the collateral and sell it to get their money. Even filing for Sacramento bankruptcy can only delay the loss of your home or car if you don’t keep up the payments. Unless you are willing to lose your home or car, you must make paying these secured debts a very high priority. This seems only logical, but it's shocking by the number of my clients who, probably because of collection harassment, pay credit card payments instead of their house or car payments.
If you think there is a possibility that you will want to surrender your house or car (and this could actually be a wise decision) it might be best to stop making these secured payments, but check with a Sacramento bankruptcy lawyer to help you analyze the pros and cons of such strategy.
You may have more flexibility with some other secured debts if you are going to file bankruptcy. Secured debts like finance company loans or store credit cards are likely to be discharged in bankruptcy, where they can often be treated the same as unsecured debts.
If you are having financial hardship and are considering filling for bankruptcy, please call our office at (916) 971-8880 for a FREE confidential bankruptcy consultation.
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