Hierarchy of Secured, Unsecured and Priority Debts

[anonymuse]

I know secured debts get paid before unsecured debts; and priority unsecured debts get paid before non-priority unsecured debts. But I'm trying to figure out which take precedence within those categories.

This is my uneducated guess for my situation:

SECURED

1. Mortgage -- I've never missed or been late on a payment
2. HELOC -- I've never missed, but I was a few days late on one payment; at times only paying minimum/interest only
3. Lien -- Got months behind on home owners association dues and they blasted me with unreasonable late charges and lawyer fees

UNSECURED - PRIORITY

1. Uncle Sam (2005 Income Tax due Monday--the check won't be in the mail)
2. Student Loans - paying interest only and no late or missing payments

UNSECURED - NON-PRIORITY

? Overdraft protection on checking account (is this right category?--I didn't realize this was considered "credit" until yesterday so they've been receiving "preferential" treatment/payment everytime I deposit my paycheck and start the month in the black--otherwise, I can't withdraw cash)

? Lawyer fees (is this right category?)

? Life insurance payments (is this right category?)

? Medical bills including yearly deductible (paid very little)

? Credit cards (haven't paid in months and they're really ticked off at me)


Second question:

After filing but before a decision has been made, how do you decide which debts to pay? Which get a stay?

I'm obviously not going to try to get rid of any or caught up on mortgage or HELOC payments so I'll keep those payments going...

Not sure about Student Loans...

But who next? Is this a chance to pay the lawyer?

[13inOR]

The attorney fee is paid FIRST, right off the top before anything else, even
the mortgage if you were behind.
Then mortgage lates (if applicable) and car loans, then taxes.
The credit cards, unpaid utilities,medical bills, etc are paid last.

This was the way ours went, in this exact order. I didnt have any student loans but I do know those are considered priority so in your case, those might come off the top, right after the attorneys fees. When you say life insurance payments, I cant imagine a case where you would file bk on those.....if you were behind they would just cancel your policy. As far as paying for life insurance, that would be considered in your monthly budget I would assume.
Hope that helps some.

[anonymuse]

My life insurance has a great thing that if you got behind on payments, they sort of give you a line of credit which would be deducted when the plan paid out. My insurance guy has been a saint since he knew my dad bought this policy when I was really young and transferred it to me when I became 21.