B3459-3 MMANAN AAGIGIGINGNG between Deciding which bills to pay first hen you are between jobs, the Answer these Wpaychecks may questions stop coming, but the bills don’t.When you JJOBOBS S I How long is your present situation do not have enough money to cover your likely to last? Linda Boelter monthly expenses and pay all your creditors, I How much income can you count on you face some tough financial decisions. each month? You may be tempted to use credit cards, I How much money do you need to take out a home equity loan, or borrow cover essential monthly living money to pay bills. But taking on more expenses? How much is left for debt debt is generally not a good idea. Unless repayment? your situation turns around quickly, more debt only creates bigger problems. I What assets — savings or items you could sell — do you have that could Instead, focus on cutting your spending help pay off your debt? and working with your creditors to reduce your payments until your situation I Who are the creditors you owe, and improves. how much do you owe each one? List the monthly amount due, the amount past due, and the total balance you Sizing up your owe. Use Worksheet 1 on page 2. situation I What is the interest rate for each debt? When your bills add up to more than you You may be able to transfer balances can pay, you need to contact the people to from a high-interest loan or credit card whom you owe money — your creditors. to one with a lower interest rate. Explain your situation, and ask for their I What is the collateral — security for help. installment loans or credit contracts? If Creditors are usually willing to work with you are not sure which loans are you if you contact them before you get secured, check the credit contracts. List behind in your payments. these items in the column labeled Before you talk with your creditors: “Security for loan” on the worksheet. Carefully examine your situation to decide These answers are important to know for whom, how much, and when you can pay. talking with creditors. For example, if you Completing Worksheet 1 on page 2 is the use your car as collateral on a loan and you first step in preparing a repayment plan default (cannot repay that loan on time), you can afford. the creditor can repossess your car to pay the debt you owe. For help completing Worksheet 1, see the following fact sheets in this series: Setting spending priorities/Cómo establecer las prioridades de gastos, Strategies for spending less/Cómo gastar menos, and Making the most of what you have/Cómo sacar el mayor provecho de lo que tiene. 2 Worksheet 1: Monthly debts owed To complete this worksheet: I Answer the questions on page 1. I List all the creditors to whom you owe money. Be sure to include all credit card accounts, merchant charge accounts, installment loans, personal loans, and past due accounts. Monthly Amount Total Interest Security Creditor payment past due balance owed rate for loan TOTAL debts owed: MANAGING BETWEEN JOBS 3 Your reduced income may fall within Who gets paid first? guidelines for receiving government food What will you lose if You are legally obligated to pay all your assistance: creditors. But if there is not enough the bills are not paid? money to pay all your bills, you must I To find out if you qualify for Food In addition to your house or car, you can decide which creditors to pay and how Stamps, contact your county or tribal lose other property if you fail to make much. social or human services office. payments. Loans to purchase furniture, appliances, boats, recreational vehicles, and I To see if you qualify for the Women, One way to do this might be to divide the electronic equipment often include the money available, and pay every creditor Infants, and Children (WIC) nutrition program, contact the local WIC office item as collateral for the loan. Even so, part of what you owe them.This may seem repaying secured loans may have a lower fair, but it does not always work. (www.dhfs.state.wi.us/wic), or tribal or public health department.You do not priority, especially if you can manage Each creditor must agree to reduce the need to be on public assistance to without the item. amount they receive and extend the receive WIC benefits. payment period. How much do you still owe? If you need a vehicle to keep or get a job, This method also does not take into paying car loan or lease payments is a Determine how much you have paid on account that some bills, such as those for priority. Because the vehicle is usually the each loan and how much you still owe. If essential living expenses, are more impor- security for the loan, you must also make you have only one or two payments tant to pay than others. Instead, decide payments on time to avoid repossession. remaining on a loan, it may be worthwhile which bills must be paid right away and to finish paying and get that debt out of If you lease a vehicle, check your lease for which ones can wait. the way. penalties that result from default (failure to Here are some questions to help guide pay) or early termination of your lease. You may be able to return newer items or your decisions. sell them to pay the debt.You will need Take care not to let medical insurance slide the creditor’s permission to sell an item when money is scarce. If anyone in the used as security for a loan. If you choose to What will most affect family becomes ill or injured, medical bills surrender the item to the creditor, you will can be devastating without insurance. your family’s health still be required to pay the difference If you lost your job and had medical insur- between the market value and the amount and security? ance through your employer, you should remaining on the loan. Housing, utilities, food, transportation, and receive a notice about continuing your Or you could try negotiating with the medical care usually take priority. coverage. If you can afford to pay the creditor. If you owe more than the market premium, continuing the insurance is gen- Unless you plan to move to less expensive value of the item, offer to pay a little less erally a good idea — especially if someone housing, keeping up with your rent or than its value to settle the debt. Be sure to in your family has an existing medical con- mortgage payments is essential to avoid get the agreement in writing. eviction or losing your house. dition that requires care. Also make sure the creditor agrees to Often, the only way to avoid restrictions for For suggestions on what to do if you remove any negative entries that have a pre-existing condition is to maintain cannot make payments for rent, mortgage, been reported on your credit record as the coverage with the same insurer. For more property tax, or utilities, see the fact sheets result of that loan. in this series Keeping a roof overhead/Cómo suggestions, see the fact sheet in this asegurarse de que la familia tenga donde series Meeting your insurance needs/Cómo cobijarse and Strategies for spending pagar por el seguro que necesita. less/Estrategias para gastar menos. If you do not have health insurance: While food is essential, there are ways you Your reduced income may qualify you for can reduce the amount you spend on food Medicaid — medical assistance for people each month. For ideas, see the fact sheet in of any age who cannot otherwise afford to this series Strategies for spending less/Cómo pay their bills. Uninsured children may gastar menos. Or contact the Wisconsin qualify for BadgerCare. Contact your public Nutrition Education Program at your or tribal health department. county UW-Extension office: www.uwex.edu/ces/cty. DECIDING WHICH BILLS T O PA Y FIRST 4 Property taxes You may be able to have payments Do you owe child deferred — or postponed — during support, back taxes, or If you are a homeowner with reduced periods of unemployment or financial income: Make sure you know when your hardship. But you cannot qualify for a student loans? property taxes are due. In most of deferment once your student loan is in Wisconsin, property taxes can be paid in default. Child support order two installments: For more information on repaying student Failing to pay a child support order can I The first is due January 31 and is loans, request a copy of The Student have serious consequences.You may be payable to the local treasurer. Guide/Guía para estudiantes from the held in contempt of court, have your I The second is due July 31 and is Federal Student Aid (FSA) Information wages garnished, have your tax refund payable to the county treasurer. Center at (800) 433-3243 or intercepted, or be jailed. If you are late paying property taxes: www.studentaid.ed.gov. If your income has dropped sharply: You will receive notice of any actions.Take Contact your family court to find out about these notices seriously. obtaining a lower support order as soon as Do you have Beginning February 1 or the day after the possible.This cannot be done retroactively. first installment is due, you will be charged outstanding balances If you do not modify the order and fail monthly interest on the full unpaid on credit or charge to make child support payments: You are property tax, adding to your total bill.