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We all experience dark moments in life. The most painful are the ones from which we can’t solve our way out. Dire circumstances simply outmatch our cleverness. One such dire circumstance occurs when our available funds are outmatched by what we need to pay immediately to cover our bills.

Bankruptcy may be a tempting way to pull oneself out of the quagmire. It looks like an effective approach to put an end to a balancing act that is slowly tipping and crashing on the debt side. But aside from the ethical questions of not fulfilling promises to pay, there are consequences of bankruptcy that last for months and years.

The reasons people dig themselves into a credit hole are as numerous as there are debtors. They range from an unhealthy infatuation with building up a designer shoe collection to a small-business financing approach involving accessing personal credit rather than the more challenging business credit.

For those who want to make the most of the resources they do have in order to keep as many of their financial obligations up to date as possible (and keep their credit rating as untarnished as possible) until hopefully their situation takes a turn for the better, here are some strategies that work.

First of all, don’t be afraid to contact your creditor and explain your situation. After all, the person on the other end of the phone is human, too (though there are degrees of compassion in humans!). An honest explanation of a hopefully transitory situation can help lessen the immediate burden by resulting in a possible revision of terms.

As a basic principle (and yes, this is a self-preserving approach), pay off the obligations first that have the maximum impact on your personal life and that of your family.

Pay any debts that relate to your housing first. As the saying goes, our home is our castle, so preserving it is fundamental. You may feel terrible that you splurged on your mastercard last month and now you can’t make the minimum payment for it and pay your rent, too. Pay the rent first (or the mortgage, if that is the case).

Pay on any secured debts or leases. You don’t want to get behind on these if you can avoid it. Pay any loans or leases that have physical assets attached. Most of us need our vehicles in order to work. Vehicles are one of the easiest assets to repossess. If the vehicle is high end and more than you really need, you could try to work out an arrangement with the car dealership to sell it back and pay off some of the loan while purchasing or leasing a more economical model.

Pay utility bills. This is another area where you do not want to slip behind. Utility companies can be relatively forbearing (though it’s not fun to watch the interest charges build on every bill), but there comes a point when they say “disconnect”, and off goes the power, phone and/or internet service. In some areas (where temperatures are below zero half the year), electricity cannot be disconnected over the winter months, but come spring, it is mercilessly turned off until the account is paid up. Restoration of service will probably mean reconnection fees.

Pay taxes. Local governments have the authority to put real estate within their jurisdiction on the auction block for unpaid property taxes. And because tax sale properties are often listed in the local newspaper, news soon gets around town that the delinquent hasn’t paid his or her property taxes in a while. Income taxes are another prickly issue because they involve the federal government and all the accompanying power (and fear). Fortunately tax authorities are open to negotiations – installment plans, and even accepting a lesser amount due. But they can garnish wages, seize assets and generally be downright nasty if the debtor tries to avoid the issue.

Pay student loans and child support payments. This type of credit is somewhere in the middle of the pain scale. Lenders do have the right to sue for assets and garnish wages, but negotiations can go a long way if you simply find yourself in an impossible situation that you honestly don’t want to be in. Child support non-payment tolerance will depend a lot on the character of the one to whom the payments are owed, but student-loan lenders will adhere to programs that have been set up to help grads who are struggling to be free of past student debt.

Pay credit cards and personal loans. Finally! This is the area that puts most of us in hot water. And with the effects of compound interest and late penalties, it’s no wonder. If spouses are involved (and they usually are), pay off the minimum payments of the one who holds the majority of unsecured assets in his or her name. In other words, if the spare truck (that is actually paid for) is in the husband’s name but not the wife’s, pay off his credit card bills for the month first. And if you have multiple credit card accounts, pay the minimum payment of one one month, the other the next. Credit card companies will try to recapture the debt for a while (usually six months after first non-payment) before charging it off to a collection agency. The collection agency can sue the debtor in order to seize his or her unsecured assets. If the bulk of the unsecured assets are in the other spouse’s name, it makes the whole process more difficult.

Pay medical bills. Medical bills can be terrifying if inadequate medical insurance leaves them uncovered. In the United States, they have been known to run into hundreds of thousands of dollars for a single but complicated hospital visit. Pay what you can when you can. It’s better to put a small amount against your bill than to flee from it in despair.

Don’t crawl under a rock if your debt becomes insurmountable. Bankruptcy is the right solution for some. Although there are costs, it is a legal way to get a fresh start (and a way to put your new-found wisdom about credit to good use by avoiding any avoidable pitfalls of your checkered financial past).

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