Your debts have become overwhelming. Perhaps you have mounting medical bills. Perhaps you've been laid off and can't find another job quickly. Creditors are calling around the clock, each one asserting that his or her claims are the most pressing and should be paid first. When this happens, take a deep breath and do some prioritizing of debts is in order to minimize the damage until you can get on your feet again. Chicago Illinois bankruptcy lawyers can offer you advice on alternatives to bankruptcy.
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 will notice and once your omission has become known, they can garnish your wages, seize your house and assets, empty your bank accounts and generally make life miserable.
Child Support - Failing to make child support payments is another action that 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.
With those two biggies that can exponentially deepen your misery out of the way, move onto the daily needs:
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 intercepts and applied to these and up to 10% of your wages garnished. So, if your lender is pressuring you, you should probably move this up the list. For more information on federally backed student loans, call Chicago Illinois bankruptcy lawyers.
Credit Cards - These are unsecured debts and can go last on the list. Sure, they are probably the most persistent and 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 thing 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 subscription, magazine subscriptions, gasoline charges - all can go at the bottom of the priority list for now.
Responsibility for personal debt and the knowledge of how to reorder spending and debt payoff can go a long way toward clearing out past financial problems. However, if debt is overwhelming and bankruptcy seems the only choice, Chicago Illinois bankruptcy lawyers can guide you toward the avenue best suited to your needs.