Some of these debts include:

• Auto insurance. In some states, you can lose your driver's license if you drive without insurance. In California, you cannot even register your car without proof of insurance.
  
  
• Medical insurance or bills. If you let your health insurance lapse, you may have difficulty getting new insurance. Especially if you are currently under a physician's care, you'll want to continue making payments. Credit and charge cards. If you don't pay your credit card bill, the worst that will happen before the creditor sues you is that you will lose your credit privileges. But penalties and interest add up quickly.
  
  
• Car payments for a car that is essential for your job. The inconvenience of not having a car may justify making these payments.
  
  
• Items your children need. Paying for a tutor for your child may not seem essential, but if the alternative is to have your child grow up unable to read, you probably want to keep paying for the help.
  
  
• Court judgments. Once a creditor has a judgment, the creditor can collect it by taking a portion of your wages or other property. If a particular judgment creditor is about to grab some of your pay, the fact that the original debt may have been nonessential is irrelevant.
  
  
• Student loans. Paying an old student loan isn't essential if the holder of your loan isn't hassling you. But paying the loan may become essential if the IRS is about to intercept your tax refund, if the holder of your loan threatens to garnish your wages, or if you are making payments under a "reasonable and affordable" repayment plan to rehabilitate your loan and get out of default.

Do not make payments on nonessential debts when you have not paid essential ones, even if your nonessential creditors are breathing down your neck. This may sound obvious, but when pressured by bill collectors, many people forget the obvious. For example, if you pay a few dollars on an old hardware store bill just because its collector is the loudest or most persistent, you may face eviction or have your heat turned off because you won't have enough money left to pay for these crucial services.