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Prioritizing Debt: Which Bills do I Pay First?

Authored By: Northwest Justice Project - CLEAR Intake Line LSC Funded
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General information about which bills you should pay first when you are having trouble paying all of your debts. #0110EN

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What can I do about my debt?

Nearly all of us at some time have faced a problem with bills we cannot afford to pay:  credit card debt, a doctor’s bill, or an unpaid student loan. You may have enough to pay some bills, but not all. You may not know which to pay first.

This publication gives general advice only. If you have serious debt issues, check with other resources, including a lawyer. There is information about helpful resources at the end.

Do not pay anyone to consolidate or settle your debts!  Free credit counseling assistance is available if you need it. See www.atg.wa.gov/debt-relief-credit-counseling for more information.

Which bills should I pay first?

1. Food and Housing

These are most important.  You do not want to become homeless or not have enough to eat and stay healthy.
Renters - If you do not pay rent on time, the landlord can evict you even if you have a good reason for not paying. Examples: you get sick, or lose your job.

Homeowners - If you are behind on mortgage payments, you could end up in foreclosure.  If you cannot afford your mortgage payments, find a housing counselor at 1-877-894-4663.  If you have a low income, contact the Northwest Justice Project’s Foreclosure Prevention Unit (FPU) at  1-800-606-4819. For help paying rent, call 2-1-1 for names of social service agencies that might be able to help.

*If you cannot afford to buy enough food, contact the local DSHS office. Find out if you can get food stamps.  Call 2-1-1 to find out where food banks are in your area.

2. Utilities

You must pay your electric, gas, water and phone bills to keep these services.  Do not wait for a shut-off notice!  Many utility companies have payment plans where you pay the same amount each month so you can budget your money. You may also qualify for the Washington Low Income Home Energy Assistance Program (LIHEAP) benefits for help with home heating costs.  See www.benefits.gov/benefit/1586.

3. Car loans and car insurance

If you need your car to get to and from work, you must make your car payments on time.  One missed payment can result in repossession of your car.

Car insurance is also important. Washington law requires all drivers and owners to have insurance.  If you do not have insurance and are in an accident, your driver’s license may be suspended.  Do not let your car insurance lapse!

4. Child Support

If you owe child support and cannot afford to pay, at least make a partial payment each month.  Then, contact the Division of Child Support (DCS) or a lawyer. See if you can modify (change) the current support order.  Failure to pay anything may result in the suspension of your driver’s license.

If DCS is garnishing support from your wages, contact a lawyer. Find out if you can get the amount being garnished lowered or your current support order modified. If DCS agrees to lower your monthly payment amount, they may require you to sign a document waiving the Statute of Limitations for how long DCS is able to collect from you.  Talk with a lawyer before signing this waiver.  Read Change Your Child Support Order, Asking DCS to Review Your Child Support Order for Modification, and/or Child Support and License Suspension.

5. Federal Student Loan Debt

Contact a lawyer or go to studentloanborrowerassistance.org to find out options.  You might be able to defer (put off) making payments. There are also income-based repayment plans based on your current income and household size. Your payments could be as low as zero.

If you are in default on your federal student loans and are not in deference, forbearance, or a payment plan, the Department of Education might garnish your wages or Social Security benefits, or take your federal income tax refund. Read Default and Delinquency, by Student Loan Borrower Assistance.  

If you have private student loan debt, repayment options are different than for federal student loans.  Contact a lawyer or go to studentloanborrowerassistance.org for more information.

6. IRS debts

Contact a lawyer.  Depending on your income, the Internal Revenue Service (IRS) might put your debts “on hold.” You can discharge in bankruptcy some debts owed the IRS.

*If you have a low income, you may be able to get help from a taxpayer clinic. Contact them at 1-(866) 866-0158 toll free in western Washington or 509-313-5791 in eastern Washington.

7. Hospital and Medical bills

If you have hospital bills because you went to the emergency room or had to be admitted to the hospital, you may be eligible for Charity Care.  This program helps pay all or part of a hospital bill if it finds you have a low income.

You can apply for Charity Care through the hospital.  Read Charity Care: Medical Coverage for Hospital-Based Medical Services.

If you have hospital bills not covered by Charity Care, or you have other medical or dental bills, you may be able to discharge (get rid of) these bills in a Chapter 7 bankruptcy.  You can only file for Chapter 7 once every eight years. Read Should I File for Chapter 7 Bankruptcy.

8. Credit Cards

If you have credit card bills you cannot afford to pay, pay these bills only if you have money left over after paying other bills.  All a credit card company or collection agency can do if you do not pay this bill is file a lawsuit against you.  You cannot be arrested.  You cannot go to jail.

If you have a lot of credit card debt and/or medical debt, you can discharge (get rid of) it all through a Chapter 7 bankruptcy. But you can only file for Chapter 7 bankruptcy once every eight years.

Debt collectors are calling and constantly harassing me.  What should I do?

Do not talk to them.  They will try to scare you into paying them money you cannot afford to pay.  It is okay to screen your calls or just hang up.

Do not use money you need for rent, food, or other essentials to pay a collection agency.

Never give a collection agency your personal information

Never give a collection agency or other creditor your bank account information or authorization to withdraw money out of your bank account.

If the collection agency is contacting you more than three times a week, or in the middle of the night, or is threatening you, contact a lawyer as soon as possible.

Someone came to my door and handed me court papers. What should I do?

Do not ignore court papers, even if you think they are for someone else or you do not owe the person suing you.

You have twenty days from the date the court papers were handed to you to file a written response.  There may be a different date on the court documents, but you have twenty days from the date the papers were handed to you or a member of your household.

Contact a lawyer as soon as possible. How do I Answer a Lawsuit for Debt Collection has forms and instructions.

What if I cannot afford to pay my debts?

The law protects certain types of income and property from garnishment by creditors. They cannot take these funds from you to pay off a debt, even one a court says you owe. These funds are “exempt.” There are a few exceptions to these exemptions for child support, federal student loans, and some other debts to the federal government. Read Money That Cannot be Taken from You (“Garnished”) to Pay Off a Debt.

This publication provides general information concerning your rights and responsibilities. It is not intended as a substitute for specific legal advice.
This information is current as of July 2019.

© 2019 Northwest Justice Project — 1-888-201-1014
(Permission for copying and distribution granted to the Alliance for Equal Justice and to individuals for non-commercial purposes only.)

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Last Review and Update: Nov 01, 2018
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