If You Have Money Problems
by: Developed from materials provided by the National Consumer Law Center
If You Have Money Problems
If you can't pay everything at once . . . . .
- You may not have the money to pay all your bills at once. If this is true you must make a choice about what to pay first.
- Nasty calls and letters from collection agents are stressful. They have also caused people to pay the wrong bills first.
- This can result in problems for the family. Though scary, a debt collector can't do much to you.
- Don't let them talk you into making bad choices for yourself and family.
- Collection agents may threaten to sue you. They may threaten to take your things or part of your pay check. Do not listen to these threats unless a lawsuit has been filed and you've gotten court papers.
Which bills to pay first?
Here are some rules for deciding what to pay first. Pay for what your family needs to survive first:
- Mortgage or rent payment should always come first. (Any debts that could cause your house to be taken should also be paid on time);
- Next, pay for food, medicine, and essential clothing;
- Next, make certain that water and heat are not disconnected.
The utility company may not require payment in full even if you are behind. So call them and talk to them about your problem.
The other reason to call them is that if your heat or water is cut off, you may have to pay extra money to have it turned it back on;e
- Next, worry about car loans (also pay any debts that could cause your car or someone else's car/house to be taken);
- After this, pay taxes and student loans; Credit cards, doctors bills should be paid last.
Other Tips . . . . . .
- Don't pay those debts that you do not owe.
For instance, if you bought a car that is a lemon, call a lawyer or take legal action. Don't pay for a car that doesn't run or is falling apart.
- Try to work out a payment plan but make sure it's something you can stick to.
If you make a deal to pay $100 per month for heat and you don't do it, the company may not want to help out in the future
- Cut out things you want but maybe don't need.
You should be able live without things like cable TV.
You may also be able to live without caller ID.
You may want to cut down on eating out.
- Do not take on new debts until your old ones are under control.
- Make a budget that will help you plan for the future.
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