About Unsecured Loans

Debt can be suffocating.  Sometimes it seems like debt attacks you from all angles'mortgage/rent, car payments, credit cards, personal loans. But, as claustrophobic as debt can make you feel, paying some of it off can feel as though you just stepped into an open field with fresh, cool air to breathe.  The first thing you need'aside from money'to tackle your debt is motivation.  And, one of the best ways to locate motivation is by prioritizing your debt and making a checklist.

First things first, you need to make note of each and every debt.  Sit down and sort through that heap of notices and statements you've let gather on the coffee table.  Once you have it all laid out in front of you, it's time to start making a list from most important to least important.

Separating your debts into a secured debts pile and an unsecured debts pile is a good place to start.  Basically, a secured debt is backed by assets'home, car, furniture, etc.  An unsecured debt is just the opposite; there are no assets backing them.  However, both need to be paid.  That being said, it's a good idea to place a higher priority on secured debts than unsecured debts.  After you've established which debts are secured and which are unsecured, it's time to get into some specifics.

Keep a roof over your head

You won't get much leeway with missing mortgage or rent payments.  After only a couple missed payments, lenders will typically initiate foreclosure proceedings.  You don't want to be in a position where, on top of losing your home, you find yourself looking for a home with a blemished credit record.

Utilities

It's not easy getting by without power and water.  You might find a little more leniency with your utilities than your mortgage, but it's still nothing to mess around with.  Once a service gets shut off it can be rather costly to get it turned back on.

Car payments

If you need a car to get to work, or to find work, it's important you keep it around.  It's fairly easy for lenders to repossess your car, and they don't even need to provide notice.  Also, remember that your car payment includes your insurance.

Other payments

Other payments that need to be high on your priority list are taxes, child support, and student loans.  Failure to pay taxes and child support can result in asset seizure as well as jail time.  Also, the government backs student loans, so it's important that they get paid off.

Unsecure debts

Believe it or not, this is where credit cards should rank.  However, if you have credit card debt, it's important to stop using that card. You don't want to add to the problem.  By setting aside five or ten dollars a day, you'll be able to pay off your debt in a hurry.  Also, in this category should be any personal loans.  Your friends and family should understand you're in a bind, but once you're able to, make sure you pay them back.

Going into debt can be surprisingly easy.  And while it's not nearly as easy to get out, it's probably not as hard as you think.  A little organization and some personal restraint can go a long way.  However, if you don't trust your organizational skills, there are plenty of debt management programs out there willing to help get you out of a financial hole.