There are many people throughout California and the United States who are dealing with a significantly reduced and limited income. If you are one of them, you may wonder: What bills should I pay first? If you cannot pay them all, keep reading to learn the order in which you should prioritize them. Remember as well that if you continue to have issues, The Law Offices of Paul Y. Lee can help you determine if bankruptcy is the best way out for you.
Housing is Your Highest Priority
There is nothing as important as your home and the bills that are related to it. In most households, hosing is both the most expensive thing they have and the most important. In most cases, if you didn’t pay rent you would be evicted and if you did not pay your mortgage then you would eventually face disclosure.
In the specific conditions that have come along with COVID-19, many states and larger cities have come to agreements to freeze evictions. Many mortgage lenders are working with individuals who cannot make payments. However, if you can make your payments then you should. Why? Because if you take advantage of the option to “skip” a payment, you are likely not skipping it at all – you will be responsible for all back payments in a few months’ time.
Utilities and Car Payments are Medium Priority
Once you have paid your mortgage or rent, you know you have shelter. Next, make sure you are up to date on your utilities such as water, electric, sewer, and gas. If you fall behind on these, then you could end up paying high fees on the missed payments plus reactivation fees.
During COVID-19, most areas are not shutting off utilities – even for nonpayment – but that does not mean that you want to wait to pay these. If you cannot pay them, reach out to the providers to see if they have hardship programs that could help you.
For most people living in California, owning a car is a requirement to get to work, get groceries, and live their lives. If that is true for you then your car payment should be a medium priority to you. You do not want to have your car repossessed. Many car lenders are offer payment deferrals, no charging late fees, and offering other assistance during the COVID-19 pandemic. Just reach out to your lender to find out if you can get help.
Everything Else is Lower Priority
Once you have assured that you have somewhere to live, you have utilities, and you have transportation, everything else can fall in line. This includes everything from back taxes to medical bills to credit card bills. Even federal student loans are on automatic forbearance until October 1, 2020. Contact The Law Offices of Paul Y. Lee now at 951-755-1000 if you want a free consultation with a bankruptcy attorney who can help you determine the best way forward.
