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TREVOR R. PRICE
Food and shelter, of course, are necessary for life - increasingly so when facing the prospect of a financial crisis. It is a difficult task to dig out of financial hardship, especially when reinforced by lifelong habits.
With the barrage of creditors calling to demand payment, it can become confusing who to pay first when funds are low. If you find yourself in a financial crisis like this, you have to prioritize. Take care of your family first; everyone else simply must wait their turn.
Squeaky Creditors
Though your mortgage lender may be the quietest of your creditors, nevertheless be sure to pay them first. It's tempting to skip a mortgage payment since it's likely the largest payment you make each month.
Doing so, however, simply turns one problem into an even bigger one. Defaulted credit cards will damage your credit score. A defaulted mortgage will eventually take away your shelter.
Prioritize your bills and cover the ones that are mandatory for your well-being. These are the most important ones right now. Shelter, food and utilities fall into this category. Credit cards, cable and memberships do not. It's not that those are unimportant - au contraire. But they simply aren't at the top of the list.
The Bill's in the Mail
Don't avoid your creditors. You owe them money, but you just may not have it at the time it's due. Be honest with your creditors and tell them what type of payments you can send them. They will try to bully you into sending more, but stand your ground. Pay only what you can afford.
Some creditors will threaten you with legal action and bad credit reports. But more often than not, they will work with people who seem sincere about negotiating a way to eventually pay back what is owed.
In that context, though, bear in mind that the lender who holds your mortgage can take your house. This is why they must get first dibs when you are doling out payments.
Silencing the Creditors
Creditors won't stop calling until they receive the money owed. A strategy of using home equity loans and second mortgages can be used to pay off other bills. However, this is simply a temporary fix. The many bills are just being transferred into one big one. That doesn't resolve the real problem.
When you are spiraling in a financial crisis, it is hard to know which way to go. Everyone wants their money before you even have it in hand. Put your necessities first. It's tough to climb out of the hole if you're struggling simply to pay for food and fighting to avoid foreclosure.
About the Author
Trevor has been writing on a wide range of topics for several years. Not only does this author specialize in foreclosures, but you can also check out his latest hand held steam cleaner website which reviews - among other options - the best rug steam cleaners for your home carpet cleaning.
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