University of Illinois Extension

Managing Your Debt: Deciding Which Bills to Pay First

Your Repayment Plan

Once you have determined how much money your family has for monthly living expenses and for paying off debts, decide how much you can pay to each creditor. Work out a repayment plan that shows how much you plan to pay on each bill. Put this plan in writing.

Now you are ready to contact your creditors to explain your situation. Tell each one how much you can pay and when you will pay them. For ideas about what to say when you contact your creditors see Talking with Creditors.

Some businesses, such as utility companies, have special counselors for customers who can’t pay their bills. These counselors can help you set up a budget plan to even out your payments during the year. They can also tell you if you qualify for government assistance programs that help with your energy or medical bills.

Making Your Plan Work

After you have worked out a repayment plan with your creditors, follow it. Make the payments you promised. If you fall behind on your new commitments, creditors will be much less understanding. If you fail to pay as promised, creditors may hire a collection agency or start legal action against you.

Pretending you have no money problems won’t make the problems go away. Face the situation honestly. Openly discuss spending decisions with all family members. This will help everyone understand the changes and sacrifices needed for your plan to succeed.

Remember:  No matter how bad your situation may be, you can’t afford to ignore your bills and creditors. Prompt action is very important. Take charge. Let your creditors know you are having trouble before you miss payments and the situation becomes worse.


Detweiler, Gerri. The Ultimate Credit Handbook. Penguin Books: New York. 1997.

Leonard, Robin. Money Troubles: Legal Strategies to Cope with Your Debts. Nolo Press: Berkeley, CA. 1996.

Sheldon, Jonathan and Gary Klein. Surviving Debt: a Guide for Consumers. National Consumer Law Center: Boston. 1996.

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