Itemize and Prioritize

It is important to pay back all of the debts you owe. However, if there is not enough money to make payments on all of your loans, consider prioritizing your debts. Debts you may want to pay first include mortgage or rent, utilities, secured loans and insurance.

Second priorities may include credit cards and unsecured debts to finance companies. Some examples of third priorities are doctor, dentist and hospital bills. Family members and friends usually are willing to wait.

Set up your debt-payment plan. Write the creditor’s name in the first column. Figure the percentage of total debt owed each creditor and write it in the second column.

Write the amount of the original monthly payment in the next column. Decide if you will pay the debtors in equal amounts (Method A), by proportions (Method B or C) or according to what action the creditor might take (such as garnishment or repossession).

Write the dollar amount you can pay each creditor each month in the fourth column. If the creditor accepts your plan, write the actual amount you will pay each creditor in the appropriate monthly columns.

Your thoughts on this subject? Your comments appreciated!

Content © Rich Brott, 2011

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