Surviving Debt-Part 1

With so many people out of work, it is scary for many as they try to figure out how they will pay their creditors. There are certain creditors that you should consider paying first, but ultimately the decision must be what is right for your family.

You are not a deadbeat when circumstances outside your control prevent you from paying all your debts. Most people don’t pay their bills because of job loss, being laid off, illness, taking care of family members, and divorce. Remember when creditors call the number one goal is to get you to pay their debt first whether it is in your best interest or not. Ultimately, you will need to decide which debts should be paid first but here are some considerations.

• Mortgage Debt/Rent. You must have a place to live so it is important to pay this debt. If you need to miss a month on your mortgage, you should contact your mortgage company first. Most likely they will work with you if you contact them upfront and it is unlikely that the company will file a foreclosure on one missed payment. Many mortgage companies have modification programs to help with your mortgage payments when you become unemployed, divorced, or sick. Rental payments may be harder to negotiate. It may be easier to try to contact an outside agency for rental assistance. The eviction process is much quicker than a foreclosure.
• Automobile Payments- This debt should be paid because the creditor can repossess the car. In South Carolina, the lender can repossess the car in two ways. The lender can file a claim and delivery action in court, or the lender can simply come and take your car from any location including a driveway, workplace, street, or parking lot.
• Criminal or Traffic Court debts-If you do not pay these debts, there may be additional consequences such as the loss of your driver’s license, a fine, or incarceration.
• Utility Debt-If you do not pay your utility bills, the services can be disconnected. Always contact the utility provider to see if they are willing to offer a payment plan on the bill or check with local agencies for utility assistance. For example, right now due to the Coronavirus, Duke Energy will waive all fees for late payments and returned checks, and for credit or debit card payments for residential accounts. In addition, Duke is creating more flexible timelines for payment arrangements. Customers who were recently disconnected can contact Duke to make arrangements for service restoration.
• Child Support- If you do not make payments, you may be ruled into court for nonpayment of support. If the courts send you a notice to appear in court, you should appear. If you can provide to the court evidence that you have lost your job or some other major event caused you to get behind on your payments, the court may work with you. This does not mean they will forgive the payments. You may also file an action to reduce child support based on a change of circumstances such as a loss of job. If you would like a child support modification packet please go to https://thehowzelawfirmllc.com/ and go to the bottom of the home page. Go to “Contact Us” and fill in your information. Make sure to put “child support modification” in the box so we know what information you need. Click the sign up for our email list and we will send you the packet to file for a modification packet on your own.
• Federal student loans- You are not in default until you are nine months behind on your payments, however, the loan providers may take your tax refund, Social Security or other federal benefit or wage garnishment.