Heirarchy of Debt

[nohope]

I am involved in a post-divorce related matter and SHOULD be getting some money when it finalizes, but far from enough to pay every thing. I have substantial debt including taxes and am falling further behind each month. Is there an hierarchy of debt when it comes to paying things off? If so, is it different if I file bankruptcy or not? Can my divorce lawyer get the money for their fees before others are paid? Is there a hierarchy of secured debt and what besides your home and car are secured?

[StartingOver08]

There is secured debt, unsecured debt and priority debt. Taxes fall under the priority catagory.

Bankruptcy Basics: What is a Priority Debt?

By Karen Oakes, Southern Oregon Bankruptcy Attorney on May 16, 2007 in Bankruptcy Practice and Procedure, Benefits of Bankruptcy, Chapter 13 Bankruptcy, Chapter 7 Bankruptcy, General Bankruptcy Information

When a person files for bankruptcy protection, his debts are placed into three major categories: (1) secured (2) unsecured, and (3) priority. See Bankruptcy Basics: What is a Secured Debt? for details on secured debts. Priority debt is a debt that is generally non-dischargeable. Typically, it is money owed either to a governmental-type agency or the writers of the U.S. Bankruptcy Code felt that discharging these kinds of debt would violate public policy. Examples of priority debt include child or spousal support, most taxes (exceptions apply) and criminal fines/restitution. For everything except child or spousal support, there are sub-categories and technicalities which may make these kinds of debts dischargeable. But, mostly, these priority debts survive a bankruptcy and the person remains responsible to pay them. An attorney can help figure out which debts are going to survive the bankruptcy discharge and which debts will be discharged
http://www.************************/...priority-debt/

[nohope]

Thank you. How about other items? My lawyer has mentioned that he has gotten judgments against clients that don't pay. Obviously, I intend to pay my lawyer but I also have other bills to pay as well. I have huge medical expenses and bills. Right now there just isn't enough to go around.

[StartingOver08]

If you are not filing bankruptcy, then your priorities would be slightly different IMO. Something like:
1) Food/groceries 2) housing 3) transportation 4) utilities are all top of the list.

Put away $$ for emergencies. If you are in a 'collections' type status where an attorney is threatening you with a judgement, make sure your savings is 'safe' - maybe even not in a bank but in your sock drawer.

The most important debt to pay is IRS debt. They have the most power to make things difficult for you. Make a payment arrangement with them (in person at a local office is a little easier than over the phone I have found). If they are property taxes, then you have a little bit of time before a tax certificate is issued, but that creates other issues. Please specify the tax debt.

As to the other debt - do your liabilities exceed your assets? What is your specific situation? If the debt is very large and the payment you expect is not going to really help you - then you might want to consider using the payment to pay off or pay down your IRS debt (if any) and pay a BK attorney. Please post details.

Don't let your divorce attorney scare you into an action that will hurt you long term. If you give details (income/debt) we can possibly help you work out a plan that may or may not include BK.

[nohope]

Can the divorce lawyer get the money I am owed from the current lawsuit (same lawyer) before anyone else? Little scary about keeping money "safe" as this lawyer knows alot about my banking and financial stuff.

[StartingOver08]

What type of lawsuit is this? A divorce case or a separate personal injury type case?

[nohope]

Divorce (it's post-divorce it's in the Family Court). I do owe the lawyer substantial money and do intend to pay. (It is also my understanding that my ex may have to pay some of my legal bill.) It's dragged out for quite some time and my ex has done all they could to have it cost me a lot of money. (don't want to go there now) There is a huge disparity in our incomes. The money I should be getting is included in the lawsuit and is money my ex owes me for medical expenses and other child related expenses. I'd like to know if I get that money will I be able to determine what debt I pay.