Personal Finance Management

Once you realize that you are not being able to pay all of your debts then in such a circumstance you have to make some hard choices. You have to make up your mind and decide which bills to pay first and which ones to delay. Your one decision can make your home or apartment, your utility service, your car, and even your household possessions at stake. Given below are 5 debts that you should pay off first:

1. Put family necessities first on your priority list.

Always pay for family necessities first. Save money for food, water, necessary clothing and unavoidable medical expenses.

2. Next pay your mortgage or housing-related bills.

Next on the list comes your mortgage or rent payments. If you have your own home then in that case you have to also pay real estate taxes and insurance. In case they are included in the monthly mortgage payment, then you do not have to bother about these extra costs. While dealing with mortgage payment or rent bills, you have to remain extra cautious as failure to pay the debt can lead to eviction or foreclosure of your home. If you are having trouble paying mortgage payments then you must talk to your lenders and explain them your situation.

3. Try to make minimum payment to the utility service providers.

You may not always make full and immediate payment to the utility service providers. A minimum amount of payment will avoid disconnection of the services.

4. If the car is a necessity then pay car loans or leases

If you travel by car to get to work or need your car for essential business purposes then it is advisable to make your car loan or lease payments the next priority. Pay for the car prior to the utility services in case the car is a necessity to keep your job. If you do keep the car, stay up to date on your insurance payments as well. However, giving up your car will save you money on repayments, gasoline, insurance, repairs, and automobile taxes.

5. Pay your child support debts.

These kinds of debts do not go away and can result in extremely serious problems, including imprisonment, for nonpayment.

In the recent times, a new scheme of financing has developed for people who are having monetary issues. The scheme is called home reversion or the more commonly known as “Sell your Home and then rent it Back”. In this scheme, first you sell your house to a pre arranged party. Then due to this sale, you receive cash. With this cash, you can easily close off your debts and your outstanding mortgage payments. Thus you are released from the financial crunch and then you are relatively free financial wise. This is a good method to generate some money and live in the same house by paying rent.

If you are in a financial bind, then you may be worried about foreclosure on your house. Especially with the crisis in the mortgage market, more and more banks are foreclosing on various houses. This can be a very bad situation, as losing your home can affect your immediate family and friends. Also losing your house to foreclosure can also make you lose your face to your environment (friends and relatives). Thus in order to take care of this problem, it would be best to use a scheme called “Sell your House and then Rent it Back”. There are many agencies which specialize in this sort of thing.

One of the main problems today with everyone is definitely financial stress. There may be situations in which you might need to get quick cash to close off your debts. Thus in situations like these, you can go to agencies which specialize in “Selling Your House and then Renting it Back to You”.

In this method, your house is sold immediately for cash. In most cases speculators, investors or even the agencies themselves buy your house. Then you sign a rental agreement in which you become the leaser of the house. Thus with the money you receive, you pay off your debts and then you continue to live in your house by paying rent.