I Need To Prioritize My Debt Payments

I Need To Prioritize My Debt Payments

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People have to live so in assessing which bills to pay first, one must consider the essentials of life – food and shelter.

Paying your priority bills comes before paying all of your other bills no matter if you are getting pressure from your creditors. Priority bills include paying for somewhere to live, clothing, heat & light, and food and drink. If you have a mortgage this will also be included in your Priority bills. You must try to pay these bills first, even in a situation where there isn’t alot of income or money to pay all of the bills, these essentials of life must be paid first or day to day living will become impossible.

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All other debts are non-priority debts and must rank for payment down the pecking order. Unfortunately, we come under pressure from the creditors who scream the loudest for payment. These creditors, particularly credit card providers, often send us threatening letters or phone us frequently and aggressively or call to our homes. However, we cannot afford to lose our home and be put out on the street. We cannot afford to have our utilities cut off. We cannot live without food, drink and clothing.

Having made our priority payments then, any money left over can go towards paying any other unsecured debts. We call this money disposable income or DI for short. If our DI is big enough to service our non-priority debts (usually unsecured) by paying the contractual monthly amounts, we have no problem. If it is insufficient, the tricky bit is firstly to divide it fairly between all our creditors and secondly to reach agreement with these creditors on the amount of our monthly payments.

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If you are unsure how to do this or dont want to negotiate with the creditors then you can always seek professional advice from an Insolvency Practitioner. They will be able to determine if you are insolvent or not, and they can also assist you in compiling an Income & Expenditure Statement, and also explain all available options to you.

There are several debt solutions that could be available to you including Bankruptcy, Administration Order, a DMP, an IVA, a Debt Relief Order or Debt Consolidation. Once you know all your options and solutions you can make up mind if you feel any of the debt solutions can help you and you can then proceed. Of course you do not have to commit to anything and decide to sort out your own finances.

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If you want to find out more about being free from debt then visit National Debt Relief where you can also get more information on ivas, dmps and other debt solutions.

categories: paying priority debts,priority debts,priority bills,iva,dmp,Individual Voluntary Arrangement,debt management plan,debt management,Insolvency Practitioner,paying bills

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