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Priority Creditors

Priority for paying creditors usually is determined by legal considerations an how local creditors do business. In general there are 3 classes of priority.

First priority usually goes to rent; loans for vehicles needed for a job; utilities - like electricity, water and heat (but not cable or satellite television service), and vehicle and health insurance.

Second priority may go to child support, mortgage, past tax bills, student loans, other loans with collateral and medical providers.

Third priority usually goes to all other personal loans and credit cards. This priority listing assumes all bills are current. If you choose to delay a payment you may lose your collateral or other consequences. If legal action or collection has already been started on a debt, be sure you understand any fees which may be added.

Although some negotiation and adjustment to your debts may be possible, such possibility depends even more on the individual creditor and your past history of debt repayment.

For your Living Expenses and Pay Down Debt worksheets, decide which bills are truly essential expenses. Include them on your Living Expenses Worksheet. All other bills go on the Pay Down Debt Worksheet.

Back to Pay Down Debt Worksheet Instruction Page.