Picking up from where we left off in How to Prioritize Your Debt: 5 Tips to Keep in Mind (Pt. 1), below we will continue pointing out some more important factors to remember as you prioritize your debt and get your finances in order.
More Tips to Help You Prioritize Your Debt
Tip 2 – Once your living costs are covered, focus on debt you are legally obligated to pay.

As you prioritize your debt, a high-priority debt should be any court-ordered debts or payments you have. Contact Law Office of Jon B. Clarke for professional help with debt relief.
Legally obligated debt can include any court-ordered payments you are required to make. More specifically, this type of debt can include (but is not necessarily limited to):
- Debt related to child support and/or spousal support payments – When a family court has ordered you to make monthly child support and/or spousal support payments, keeping up with these payments will be critical to avoiding a warrant being issued for your arrest and/or being sent to jail for defaulting. If you are unable to keep up with such court-ordered payments, seeking a modification of them through a family court will be essential.
- Debt related to restitution for a criminal conviction – If you are convicted of a crime and are ordered to pay restitution as part of your sentence, then make sure you follow through with this payment. Defaulting on this type of court-ordered payment can constitute a violation of your parole or probation, which could end up meaning that you have to go back to jail (or, worse yet, prison).
- Income tax debt – While income tax debt is not necessarily “court-ordered” debt, it does fall in the category of debt that can be associated with legal repercussions if you default on paying it. Specifically, if you have income tax debt that you owe the IRS, you could find yourself being the subject of IRS collections, wage garnishments or other punitive action if you fail to pay it.
The bottom line here is that paying any debt you have that is associated with legal obligations should be your next highest priority after you’ve paid debts to cover your essential costs of living.
Tip 3 – Next, pay debt with the highest interest rates.
After satisfying your most essential debt payments, as you continue to prioritize your debt, the next highest priority debt should be your debts that have the highest interest rates. In general, this type of debt can include:
- Debt related to payday loans or cash advances – Although you should typically do your best to avoid taking out these types of loans, if you have already taken out a payday loan or cash advance on your paycheck, this debt WILL be associated with a very high interest rate; therefore, pay it back as soon as you can to avoid having it snowball exponentially.
- Credit card debt – While the interest rates associated with credit cards are typically not as high as those associated with payday loans or cash advances, credit cards can still have interest rates that are between 10 to 30 percent, which is pretty steep. If you have multiple credit cards, then prioritize your debt on these cards based on the specific interest rates associated with each card.
Be sure to look for the conclusion to this blog series for some final tips on how to prioritize your debt and get your finances in order.
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If you are overwhelmed by seemingly insurmountable debt and are looking for a financial fresh start, contact the trusted Colorado debt relief and bankruptcy lawyers at the Law Office of Jon B. Clarke, P.C. Call us at (866) 916-3950 or email us using the contact form on this page.