Low Priority Debts
Since we have covered the debts that are high priority, which ones can you put down a little lower on your list? Loans that are not tied to your most important possessions can be of lower priority. These loans include credit card bills, doctor bills, store accounts, etc. Because these loans don’t involve any collateral, creditors cannot collect valuable possessions, like your home and your car, from you. Of course, this is only a short-term solution because these debts must still be paid.
What about loans that involve a little collateral? Creditors may call to try to collect household goods that you have listed as collateral on a loan. While they may threaten to repossess your couch, it is rarely worth the time, money, and effort to actually do so. Your household goods don’t usually come with the resale value of, say, your home or your car. Plus, getting the courts involved may be too much hassle. It is also important to remember not to move these debts up in importance out of fear. Your creditors may threaten to sue. Again, dealing with the courts is a hassle for many of these companies and some of your possessions may not even be eligible for seizure.
Creditors may not follow through with their threats immediately, but you cannot be sure when they will. They will take action if your debts aren’t paid. If you cannot pay your low priority bills, it is important to review your options before a creditor’s threat turns into your reality.
Tags: bankruptcy, colalteral, creditors, hassle, Low Priority Bills, low priority debt, options, repossession, seizure, threats