Order in which to pay your bills

The easiest way to find the order of priority is to take each bill and think about what would happen if you didn't pay it. Failure to make housing-related payments, such as rent, management charges, electricity and water, would jeopardise your housing and employment. Also, non-payment of essential expenses such as food, healthcare, telephone, child daycare and insurance bills would make life difficult.

It is advisable to pay small bills and debts first, because they accrue comparatively more additional costs as a result of debt recovery. If there are other parties, such as co-debtors or guarantors, involved in your debts, think about whether in your case it is more important to pay these debts than debts solely in your own name.

Payment of individual bills and small loans as quickly as possible saves money and makes payment easier. Small loans usually have the highest interest rates and charges and they accrue comparatively higher recovery costs and court charges than larger debts. The fewer debts there are, the easier they are to manage. You may also find that payment arrangements will actually enable you to cope with payment of all your debts.

A payment holiday on your home loan might help you to pay smaller debts. Since the bank may charge quite hefty costs for a payment holiday, it is advisable to agree a sufficiently long payment holiday. If your home loan or any other secured debt has a guarantor or another person's property as collateral, you will need the consent of that person. You can also try to agree with the guarantor or collateral provider that they manage the debts during the time that you pay off other debts.

It is preferable to let bills and debts that are directly enforceable without judgment go to enforcement than those which need to go to court for a payment order. This saves you legal costs. Directly enforceable payments are amounts owed to the municipality or State and include taxes, fines, parking tickets, public transport penalty fares, social welfare and healthcare customer fees, hospital bills, municipal child maintenance support or child daycare payments and motor insurance premiums.

Published 31.12.2018