One of the most common questions individuals struggling with debt is “which debts do I pay off first?”  The answer to that question is basically that there is no one right answer that suits everyone's financial situations. Paying off your debts is a matter of prioritizing your debts. Until you get a good, solid look at your bills and financial obligations, you will not be able to make a wise decision about how to pay off debts.

Prioritizing financial responsibilities will be different for each person, so it is imperative you explore all of your options before deciding which road to travel to debt freedom. Outside of repairing your own financial situation, you may find that you need the help of a professional credit counseling or debt consolidation company to get back on track. However, getting out from under debt can be accomplished on your own with a commitment to getting debt-free and some tips for prioritizing your finances.

Pay For Necessities
While your family needs to be making cuts and sticking to a budget, it is important that the necessary needs of life are met first, including food and important medical care. While it is important to have money to cover these expenses, it is also important to control your spending in these areas and look for ways to save money as much as possible while still meeting your basic needs. Necessities will also include utilities bills to keep the heat and lights on. Necessities should not include cable bills, cell phone bills, and other “wants”.

Pay for Shelter
Whether you are renting or you own, you must keep paying your mortgage or rent as consistently as possible. Home-owner related expenses also need to be paid, including real estate taxes and insurance. The last thing you want to subject yourself to is foreclosure or eviction. Not being able to maintain payments for where you live may signal it is time to downsize and relocate to some where more affordable.

Pay Domestic Obligations
If you are required to pay child or spousal support, it is essential you continue to honor these responsibilities or you may end up facing legal action and even prison time.

Income Tax Debts
Even if you cannot afford to make the payment on any taxes you owe, it is crucial you file tax returns each year. You can make payment arrangements to pay off the debts you owe but if you fail to pay or file, you will face more serious consequences from the government than you would from any of your creditors.

Car Note
If you rely on your car to get you to work in order to make an income, you will need to keep up with your car payments or face repossession. It is also important to keep up with your insurance as the law for maintaining it can be strict and involve a lot of high fees should you be pulled over or sustain an accident. If you can't keep up with the car note you have or can't afford multiple vehicles, consider trading in your vehicles for a more affordable one.

Student Loan Debts
While student loan debts are not to be considered higher priority than food and shelter, you still need to stay on top of payments. Delinquent loans that are backed by the federal government have the power to take collection actions against you that other collection agencies and creditors cannot, including taking your income tax refunds and denying any future applications for financial aid.

No-Collateral Loan Debts
Medical bills, credit card debts and other unsecured debts should be repaid as best as possible, paying the highest interest accounts first. Since there is not collateral connected to the loans, there is not much a creditor can do to you in the short term. Do not make any of these kinds of loans a priority over other necessary debts simply because you are being threatened by further action of collectors. Work on renegotiating your original terms to see if you can lower your payments. Many creditors are inclined to work with you in times of financial crisis because to them getting some money is better than getting no money at all.