Prioritizing Debt

Collection agencies are jangling your phone at all hours of the day and night. The mailbox is filled with threatening letters and it seems that there's never enough money to go around for everybody that demands payments. The financial crunch is on and the situation seems overwhelming. Bankruptcy is a distinct possibility. What should you do? How can you simplify things until you can decide if bankruptcy is the answer? Stop, take a breath, and prioritize your debts in the following order as advised by your Detroit bankruptcy lawyer.

The IRS - Always, always, always, file your tax returns. Even if you have to file the return without payment attached. Delaying filing because you don't have the money to pay or evading filing all together will only make the situation worse. The IRS can garnish your wages, seize your house and assets, empty your bank accounts and generally make life miserable. A Detroit bankruptcy lawyer can provide for further information and advice on more difficult IRS entanglements.

Child Support - Failing to make child support payments can land you in jail, have your wages garnished and a myriad of other problems that vary from state to state. These have a way of piling up until the total owed is insurmountable, so make these payments timely. A Detroit bankruptcy lawyer can help you negotiate the Michigan child support regulations if you do not fully understand them.

Groceries, gas and medical needs - You have to eat and get to work, right? Handle these debts on a daily basis and pay cash, if possible. These expenses can be juggled around, robbing Peter to pay Paul, as the saying goes, to balance out this spending.

Mortgage and rent payments - Losing your house or home won't make things better, so pay these bills next. Mortgage companies are often open to some negotiation on the mortgage payments and sometimes will move a payment or payments to the end of your mortgage schedule, giving you at least one month of breathing room. Landlords may not be as receptive on delaying rent, but like other creditors, they'd rather have something than nothing, so give negotiating with him or her a try.

Utilities - Heat, electricity and water are essentials. Pay these next. Again, these expenses can be manipulated to save some money. Cable television and phone service are not as important and can be disconnected if necessary.

Vehicle payments - If your car payment is more than you can afford, sell and buy something more affordable. If your financial future is looking bleak for the moment, this should probably be done as soon as possible before your credit history takes too many hits and while you can still get reasonable interest rates.

Student Loans - These can go down on the list of bills to pay as long as the lender is not pressuring you. However, your tax refunds can be intercepted and up to 10% of your wages can be garnished. So, if your lender is pressuring you, you should probably move this higher up the list.

Credit Cards - These are unsecured debts and can go last on the list. Sure, these guys are probably the most persistent and maybe the nastiest. But, they sometimes will negotiate extensions or reductions of the debt in order to get something out of you. But, be aware, some companies will increase your interest rate if they think you are having trouble paying, hoping to recoup the maximum from you. Read the fine print in your credit card agreement before calling. Other such debts - newspaper subscriptions, magazine subscriptions, gasoline charges - all can go at the bottom of the priority list for now.



For experienced, knowledgeable and trustworthy bankruptcy assistance, contact the attorneys from www.legalhelpers.com. Call toll-free 800-260-1402 today for your initial free consultation or come into one of their 100 offices across the country.