Are you still on the fence about filing bankruptcy? Well, even if you are not sure if or when you will file bankruptcy, you need to prioritize your debt payments as if you were going to file bankruptcy so that you can position yourself well regardless of which choice you make.
Below are a few suggestions:
- Pay those creditors who have the most power to disrupt your life if you go into default. Debts such as alimony, taxes and child support should be paid first before paying credit card debts , medical debts or debts owed to family and friends. Failure to pay alimony, taxes or child support could end in a jail sentence, so don't take a chance. Even if you file bankruptcy, these debts cannot be discharged in bankruptcy, with the exception of some taxes. If you're unable to make payments on these critical debts you need to immediately notify the proper authorities who may be able to setup some type of temporary deferment. For example, the IRS has a "non-collectible" status which will stop all collections activities on your tax debts for up to a year, ask them about it.
- Naturally, you also want to keep a roof over your head; but deciding whether or not you will pay your mortgage depends on a number of factors. If you are already in foreclosure and don't plan on trying to save your home if you file bankruptcy, paying your mortgage may not make a difference. However, if you are not in foreclosure yet, and hope to save your home if you file bankruptcy, paying your mortgage is a good idea.
- Electricity, water and heat are all essential services; but when you're drowning in debt they can be difficult to pay. Try to get on a payment plan with these utility providers and pay the minimum until you make your decision about bankruptcy. If you decide to file bankruptcy, those utility bills can be discharged.