Which Bills To Pay First

When prioritizing post-consolidation payments, your debts and your taxes must be at the very top of the things that you have to pay.

 

In a situation where you are in debt both to creditors for their loans and to the government for your taxes, both of them have the priority and the power to foreclose on your properties or seize things that you own.

 

There are already laws and structures in place to make it easier and faster for the banks, the lending institutions and, of course, the government to seize assets. It’s basically for this reason that you should put payments to them at the top spots on your list.

 

If you skip out on payments to them for too long, you not only have to deal with the process of seizure or foreclosure. You also have to deal with recovering your solid assets – your house and your car, for example – which could have served as a backup plan in a financial emergency.

 

Make an Agreement

 

Of course, there are other debts that you’ll also have to pay.

 

Credit card debts and accounts with merchants are very common examples of these. In terms of payments, the very big difference between these kinds of debts and the debts that you owe to banks and the government is that the repayment schedule can be discussed.

 

Debt problems are very real and very widespread so it’s not uncommon for these creditors to hear about debtors who can’t pay due to other debt obligations. If you have debts to creditors like those, try calling or writing them and then asking for new payment terms. Make sure to explain your circumstances because they’ll need you to give a really good reason for not giving them their money on time.

 

These kinds of debts are low on priority not only because arrangements can be made regarding their repayment, but also because it will be very hard for credit cards and merchants to seize your home or your car.

 

After you’ve arranged your debts and consolidated some of them, it’s very important to know not only how to pay debts but how to pay them effectively. There are some debts that will take a higher priority because your creditors in those debts can take faster and more drastic measures to seize your assets as payment.

 

When planning a debt recovery scheme, identify the type of each debt clearly and list them in order of priority. That should help you stick to a good payment schedule and gradually whittle away at your problem of debt.

 

For more debt and mortgage related articles, go to :  www.globalproperty.co.za

Debt Consolidation can Save Your Credit Record

 

An important feature of consolidating bills is that it helps your credit record.

As you accumulate more and more debt, you damage your credit record. If you have missed payments or carry excessive credit card debt, your credit score suffers.

When you consolidate your accounts and pay off your outstanding debts, you stop the damage being done to your credit. You show accounts that are paid off which helps with repairing your credit.

So how does that benefit you?

A better credit score means lower interest rates in the future for things like a mortgage, car loan or home refinancing. In the long run, it can save you thousands (maybe tens of thousands) of Rands