More people than ever before are finding themselves encumbered by significant levels of debt. If this issue is not addressed it can often lead to serious consequences, such as, past due accounts and damaged credit. Individuals in this situation have several courses of action that can help them regain their financial stability. However, these actions do not always solve problems overnight. In the mean time, people are often left with a table full of overdue bills and not nearly enough money to go around. What should an individual do if he finds himself in this situation?

When the expenses outnumber the amount of available funds, it becomes essential to prioritize the debt. Let’s take a look at what this order of priority might typically be.

• Mortgage or rent. An individual’s basic means of shelter is generally the top financial priority. Home owners also have an additional incentive to pay keep this payment up to date. When a mortgage is obtained the lender places a lien on the home. This gives a mortgage company the legal right to take possession of the house in the event that payments are not met.
• Basic necessities. Bills that are related to essential services such as lights, gas and water. These services will not be shut off if a monthly payment is missed, however, they should definitely be addressed before it reaches that point. If a “shutoff” becomes eminent then in some situations this bill would jump to top priority. For example, it is essential that families with young children have uninterrupted access to heat in the winter months.