Bankruptcy: Prioritize Life’s Essentials in Difficult Times

Some Ohio consumers who are struggling to pay their bills find it difficult to prioritize which debts to pay first. Financial advisors suggest consumers pay those items that are essential in their lives. Typically, a roof over one’s head is most important — regardless of whether it is a mortgage or rental payment to be made. The second most important item is transport — especially if a person needs a car to get to work. If there are no funds to pay these essentials, it may be time to consider bankruptcy.

Auto loans and mortgages are secured debts that are typically needed for basic survival. Foreclosure or eviction and repossession may result if these payments fall behind. Other essentials include food and utilities, and it may be necessary to cut down on take-outs and cook at home in order to keep the heat and lights on.

Once ways are found to cover the essentials, any extra money can go toward credit card and other debts. Non-payment of credit card debts can have an adverse impact on a person’s credit score, and calling the creditors to ask for more time or reduced interest rates may help, but only if the financial dilemma is temporary. Continued failure to pay debts can create an unmanageable situation.

Fortunately, such unforeseen financial crisis can be overcome. An Ohio consumer who is facing mountains of debt with no means to overcome the hurdles may want to consult with an experienced bankruptcy attorney. Such a meeting can provide knowledge relevant to personal bankruptcy. With the protection offered by the U.S. Bankruptcy Code, ownership of assets such as homes and certain vehicles may be maintained while most unsecured debts could be discharged.

Source: TIME, “What Bills Should I Pay First If I’m Short on Cash?“, Anna Bird, May 31, 2016