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Little Falls, NJ 07424
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How Do Debtors Prioritize Debts?

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About Ralph A. Ferro Bankruptcy Lawyer

How Do Debtors Prioritize Debts?

Debt payment prioritization

Written and Verified by Ralph A. Ferro, Jr., Esq.

Debtors pay personal loan debt first.    When debtors do not have enough money to pay all creditors, it is interesting to note that personal loans were paid first.

The hierarchy that debtors pay their debts was found to be as follows:

            1. Personal Loans
            2. Auto Loans
            3. Mortgages
            4. Credit Cards

This order of payment preferences has been consistent since 2004.

Based on a study I reviewed from the  Trans Union’s Annual Financial Services Summit, this is counterintuitive.  Personal loans are unsecured debt versus secured debt yet debtors pay these first.

The results are clear and it is believed that the duration of time of these loans (usually less than 30 months) is a principal factor in debtor’s decision process.

Debt Repayment Prioritization

  • Which bills do you pay first?   Is your style the same as the study conclusions?

If your disposable income does not allow you to meet your monthly expenses, call me so I can meet with you personally.    I will review your situation and provide you with expert options.  Bankruptcy may be a lifeline for you.

I am here to help you gain financial successes.     I will guide you on whether filing bankruptcy is best for you.    Contact me Today.

  • If you are struggling to keep up with your monthly payments and credit card debt, please contact me before you start shuffling your payments around. There may be a solution.

You could eliminate all your debts with filing a Chapter 7 Bankruptcy or 

Pay back only what you can afford with filing a Chapter 13 Bankruptcy

Don’t hesitate to reach out to me for help

Contact me before you begin to start shuffling around your payments.

Stop your stress and don’t procrastinate, set up a free consultation with me and get an expert opinion on improving your financial situation.   

Retirement Savings - Bankruptcy Protects This Savings

Many clients come to me after they have tried to catch up on debts and withdrawn from their retirement accounts to pay bills.

  • It is critical to understand that bankruptcy protection extends to your retirement savings.
  • This means that you should not hastily withdraw or cash out your retirement savings to pay off your debts without thoroughly assessing your overall financial situation.
  • As retirement savings accounts are safeguarded in bankruptcy, they are generally untouchable by creditors.
  • You can also continue contributing to your accounts while in default.
  • Moreover, when you file for bankruptcy, your retirement savings will remain unaffected, and you can continue to contribute to your accounts as usual. It is highly recommended not to withdraw from your retirement savings.

Withdrawing from your retirement account should not be your first step in prioritizing paying back your debts.    This could have a negative financial impact on you.

Ralph A Ferro, Jr., Esq. Law Firm specializes 100% of its practice in bankruptcy law.   Mr. Ferro is  Board Certified in Consumer Bankruptcy Law by the American Board Certification.   Mr. Ferro has 30+ years of proven bankruptcy law experience and is an expert in consumer bankruptcy law.  Our firm keeps current with the most recent advancements, changes in bankruptcy law, and intricacies in this area of expertise.  You are provided with cutting-edge counsel and representation. This targeted practice approach will greatly improve how your case turns out.

See why choosing a smaller bankruptcy law firm provides you with exceptional bankruptcy help.  

Bankruptcy Protection

I offer a Free Bankruptcy Consult

I want to help you get out of Debt and Get a Fresh Start to a better financial future….

Ralph Ferro File Chapter 13 Bankruptcy
Call Today: (201) 446-5904