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What to pay first - general rules

Produced by Mariah Jennings-Rampsi, South Coastal Counties Legal Services, with funding from American College of Bankruptcy
Created June 2012

Pay for the things you must have first. Cable T.V. and cell phones are not as important as shelter and food. Pay for what your family needs before you pay for any extras.

  1. Mortgage and rent payments should always come first;
  2. Food and necessary clothing.  If you do not have money for food, contact the Department of Transitional Assistance (DTA). You may be able to get cash assistance and Food Stamps - SNAP;
  3. Pay the utility companies enough to keep your utilities on. Often they will work with you, even if you are behind or you cannot pay the whole amount. They may be willing to keep your utilities on or turn them back on, if you can pay them something. See Discounts on Utilities;
  4. Pay your car loan;
  5. Repay your loans only after you pay for your family’s needs. The first loans to pay back are for things that the seller or the creditor can take.

    Examples of things creditors can take if you do not make your payment

    1. When you buy anything on a “Rent to buy plan”, you agree to give the item back if you do not make the payments.
    2. When you lease you must give the item back if you do not make your payments.
    3. When you borrow money and promise to hand over an item if you do not make payments.  
  6. Credit cards debts, doctor and hospital bills, and accounts with merchants, are called “unsecured debts”. You did not promise to give any of these creditors any of your property, so these debts have low priority.


Do not pay any debts before you pay your mortgage, rent, utility payments, and car loan.

Do not pay a creditor just because the creditor says he is going to take you to court.

Do not pay a debt if you have a good reason not to pay it. For example, you borrowed money to buy a car and it is a lemon. Instead, talk to a lawyer to make sure your good reason is a legal reason not to pay the debt. A lawyer can also advise you about your rights.

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