Home Loans

After you’ve consolidated your debt, or even before, you’ll want to priorities your debt as some debt is more important than others. What determines which debt gets paid first is determined largely by the varying degrees of the severity of the consequences of not paying. After evaluating and tabling your debt, you must priorities it.

Large Creditors and Taxes
Banks and the government have the legal backing and systems in place to make seizing your possessions as easy as possible. Your larger debts, such as home and car loans, as well as your taxed should be paid first. These institutions have priority over your possessions. Note: credit card debt does not fall under this category.

Missing payments for these creditors will result in legal action against you, which is more than just being blacklisted. This is especially detrimental as your possessions, such as your car and home, could be used in a financial emergency as security for consolidation or sold to get yourself out of trouble. It would be a waste to have these seized because you paid your clothing accounts first.

Negotiable Creditors
Outside of taxes, home loans and mortgages and car loans, most other creditors are negotiable. (That’s not to say that banks aren’t negotiable, but too many non-payments will force their hand into taking action against you.)

Credit card creditors and retail stores can be negotiated with when it comes to the terms and conditions of payment. You will have to pay this debt, but you can come to an agreement that sees you pay your more important debt first. These institutions do not have priority over your possessions making it difficult for them to seize your assets. For this reason, they can be paid last.

When it comes to paying debt, priority should be given to those creditors who take larger measures to recover their money.