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Prioritizing Bills To Avoid Foreclosure And Bankruptcy
One of the mistakes that many homeowners facing a financial setback often make is failing to prioritize their bills. Even after they fall behind on one or two monthly bills or debt payments, instead of abandoning the least important ones, they typically try to keep on top or just a little late with them all. This can often be a mistake.
Prioritizing bills and eliminating the least important ones is the first step that borrowers should take when they face a medical emergency or unemployment. If they will not be able to pay all of their bills on time during the duration of the financial hardship, then some will have to be set aside while the most important are paid first.
Obviously, keeping food on the table and the lights on are the most important bills. Payments for basic necessities like groceries and utilities can often be economized during a hardship, but no family can survive long without food, heat in the winter, and electricity.
Second in importance will usually be any bills the homeowners have that involve their employment or business. Car maintenance and repair expenses along with gas to get to and ...
... from work are both important to keep up on. As well, if the borrowers operate their own business and are still receiving substantial income from it, these bills may take priority over others.
In terms of credit payments, then, the mortgage and any car loans should be prioritized. Of course, this does not mean that homeowners should keep an expensive car or overvalued home if they can trade in either for a used but paid-off car or go from owning a home to leasing, if the financial situation calls for such sacrifices.
Most borrowers will not want to take scarce resources away from their mortgage to pay credit cards, other unsecured debts, or low priority bills. In fact, many bills can be eliminated during a financial hardship, such as cable internet, movie rentals, or gym memberships. Credit cards that go into default can be much easier to negotiate away than mortgage balances, as well.
Of course, one of the easiest ways to reduce both priority and unimportant bills to try attempt to negotiate them down. Cable companies may be able to offer introductory rates to current customers, while mortgage companies can provide borrowers with mortgage modification plans. Homeowners should take advantage of these opportunities to try to work out a solution to foreclosure before it becomes a problem.
Any family soon to be facing foreclosure should immediately begin to prioritize their bills, paying attention to the ones most important and which ones can be reduced or eliminated. It also makes sense to begin negotiating with every company to lower rates or payments, even temporarily, which can help borrowers stop foreclosure, bankruptcy, and a whole list of other financial woes.
Nick writes for the ForeclosureFish website and blog, which provide foreclosure help and advice to homeowners attempting to save their homes. The site describes numerous methods to prevent foreclosure, including bankruptcy, loan modification, stopping a sheriff sale, and many others. Visit the site today to read more about saving your home while there is still time: http://www.foreclosurefish.com
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