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When should unsecured debt top the priority list?

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Unsecured debt is often dropped to the bottom of the list. It makes sense when you consider the fact that no one wants to put their home or car in jeopardy. There are circumstances where unsecured debt cannot be ignored. In fact, it shoots directly below household living expenses. The following is a list of unsecured debt that should never be disregarded.

*Child support - This is a court ordered payment to help support your children. Fall behind on this bill and the courts will garnish your wages and any tax return you may receive.

*Federal Income Tax - The government has lots of power to collect. The IRS does offer payment help. You have to at least make every attempt to pay Uncle Sam back. YOu could ultimately face jail time.

*State Income Tax - Never a good idea to not pay state taxes. Besides wage garnishment or a possible lawsuit, the state could ultimately seize your property.

*Property Tax - The taxing authority could potentially take your home when you don’t pay the property tax.

*Homeowner’s Insurance - If you stop paying your own home insurance, the mortgage company will buy it for you. The cost will be much higher than what you were paying and your monthly mortgage bill will increase. We all know what happens if your mortgage is not paid...

*Federal Student Loans - When you fall behind on your loan payment, the IRS will offset your tax return until payment is up-to-date. Federal guaranteed student loan debt doesn't go away. Look into income-based repayment plans for

*Health Insurance - It’s important to keep up with your health plan premiums. If you or a family member has long-term health problems, uninsured medical costs will drown your budget. It is now mandated by the government that every person is covered. There are tax liabilities for not having coverage starting 2014.

*Medical Bills - Healthcare providers and hospitals are becoming more aggressive with bill collections. There are some cases where patients with past-due accounts were sued. Contact the billing department and work out a plan that you can afford.Make the payments. It shows good faith that you are at least trying to pay off your debt.

Prioritize this list just underneath your basic necessities. Your number one priority is to make sure that your living expenses are taken care of. This doesn't mean the luxurious lifestyle you dream of. Provide a safe home for your family, vehicle as needed, food and gas. Even if your accounts have gone to collections, your basic needs come first.

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