The Best Bills to Pay Last

If you don’t pay your cell phone bill, what’s the worst that’ll happen and when?

Are some bills less critical than others in the grand scheme of keeping a head over your roof and avoiding bankruptcy?

In the short-term, yes.  But know that paying bills late—no matter which ones—can really damage your credit record and score.  However, if you’re in a major bind and need to temporarily pick and choose, here’s a hierarchy of periodic bills that need to be taken care of first and those that can wait.

Starting with the most important, these are MainStreet's suggestions:

REAL ESTATE TAXES
If you own a home and you consider it your most important asset, you have to pay real estate taxes…or else! A municipality has the right to issue a lien certificate or property deed on your home if you’re delinquent on paying your property tax, which is usually due quarterly. Failure to pay your property taxes is the quickest way to lose your home, more than being late on your mortgage, in fact, since tax liens takes precedence over a bank mortgage.

CAR PAYMENT
No one likes a visit from the repo guy.  Auto loan companies send these predators out to nab your vehicle without warning in the event you default on your Prius (Stock Quote: TM), which may be equal to just one missed payment depending on the terms of your contract. Car loan defaults are up about 15 to 20% since last year. Seeing as how a car gets you to work and work brings in money, this is one debt you really can’t afford to ignore.  If you think you’re going to fall short on money next month, call your creditor and see if it will temporarily ease your terms or help you refinance altogether.  If you’ve got a parking ticket, make that a priority too. Failure to pay on the due date could get your car towed.

MORTGAGE
This is a close tie with your car payments.  But what gives the mortgage slightly less precedence is because there’s a little bit more time between a missed payment and a repossession.  First things first, if you think you’re going to be late on your mortgage, call your bank and ask for some relief. Maybe the lender will help you refinance or cut you a break for the month. If you miss a payment one month, no one’s really going to come after you right then and there.  Most likely, you face a late fee plus last and next month’s mortgage at the same time. Slip up more than twice and it gets ugly.  Banks usually start foreclosure proceedings after three months of missed payments.

RENT
If you don’t pay your monthly rent on time, the next day the landlord will likely send you a notice to quit and offer you just five extra days to come up with the money, plus any late fees. Otherwise, you’re expected to move out.  But realize that a notice to quit is not a court paper and legally speaking nothing will happen to you if you don’t pack up and go. At that point, though, the issue gets more serious. The landlord will probably issue a summons and complaint letter, which legally starts the eviction process.  You’re expected to either defend yourself in court or do nothing and lose by default.  Soon after a marshal will then show up at your door and order you to leave.

STORE CREDIT CARD
A store credit card probably carries a higher interest rate than any other type of credit card.  While creditors won’t come to your house and take away that merino wool sweater you still haven’t paid off using your Banana Republic (Stock Quote: GPS) card, the interest and fees on that debt will fast balloon. Note also that being more than an hour late on these bills gets engraved on your credit report and knocks points off your credit score. At the least, pay 10% more than the required minimum payment so you’re a) contributing to the principal and knocking down the balance and b) curbing phone calls from the collection agencies.