An important step in the debt repayment plan is to determine which bills you should pay first. You need to develop a solid plan to prioritize debt so that you can manage your funds effectively. With the right payment plan, you can easily pay off your debts.
The following will help you understand which bills should be paid first when paying off debts:
Food and housing
It’s important to have proper living conditions, so you need to pay rent and mortgage and buy enough food. If you do not pay your rent on time, the landlord can evict you. Mortgage defaults may lead to foreclosure. You also need enough food to stay healthy.
Phone, electricity, gas and water are important, so you must pay these bills to avoid interruption of these services. Many utility companies offer payment plans where you can pay the same amount every month so that you can budget accordingly.
Car loans and insurance
Repaying your car loan on time will help you keep your car. Even if you miss a payment, the lender will take back your car. You should pay insurance on time to avoid suspension of your driving license in the event of an accident.
Child support expenses
You should continue to pay part of the child support each month. Otherwise, your driving license may be suspended. You can contact a lawyer or DCS to modify the amount you are currently paying.
Student loan debts
You must repay your student loan debt on time. There is a repayment plan based on your family size and current income. Failure to repay your student loan debt may result in your social security benefits, wages or federal income tax refunds being withheld. The repayment methods for private student loans and federal student loans are different.
You should pay IRS debt based on your income. You can pay IRS debt in one lump sum, or you can pay a short-term plan. The IRS may put your IRS debts on hold, or some IRS debts can be liquidated through bankruptcy.
Hospital and medical expenses
If you go to the emergency room or hospital, you are eligible for charity care to settle the hospital bill. If your income is low, charity care can help you pay your bills in full or in part. If Charity Care cannot pay your hospital bills, or if you have other dental or medical bills to pay off, then Chapter 7 bankruptcy may help you get rid of these bills. Chapter 7 bankruptcy can only be filed once every 8 years.
After paying all these bills, if you have some money left, you can pay off your credit card bill. If you do not pay the credit card bill, the credit card company or collection company can only sue you. You can discharge these bills through Chapter 7 bankruptcy.
If you don’t have enough money to pay these bills, you can consider using a payday loan, which will help you resolve a financial emergency.
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