The first step of any good debt reduction program is simply determining how much debt you have and to whom it is owed. This will give you the ability to prioritize which debts need to be paid with the most important ones being taken care of first. While this step might seem some what inconsequential it may be the thing you do to get out of debt. The reason for this is simple, because until you know where you stand with your debt and to whom it is owed you will have an extremely hard time coming to grips with it, let alone creating a budget to start the road to debt freedom. Debt can have a negative impact on your life both in the present and if nothing is done about it in the future as well. Once you have listed out your debts you can prioritize them from most important to least important. This does not mean you can ignore the least important ones but they can be put on the back burner until the more dangerous threats to your financial well being are taken care of. If at the top of your list you find back taxes or a lien against your property or home you need to attack this first. Penalties and compounding interest are the first of your worries in this situation but more worrisome is the power the IRS has when it comes to dealing with those who owe past due taxes. Seizing bank accounts and other assets to pay what you owe can make life very difficult if you run afoul of them. A mortgage would be another debt that is vitally important to keep paying on. Keeping you and your family sheltered during difficult times is very important from an emotional standpoint. Losing your home to foreclosure can also have long term affects on your ability to find housing elsewhere not to mention its affect on your future financial plans. Medical bills and child support payments also need to be high on your priority list. Failure to pay these can result in compensatory actions being taken against you. In the case of court ordered child support in many states you can be arrested and jailed for failure to pay. In some states you can also lose you drivers license, making it that much more difficult to get to work and accomplish other tasks that require driving. Car loans also need to be considered a high priority because it doesn’t take more than falling three months behind before car finance companies will repossess your car. Losing your car can impact your life in many negative ways. One thing to consider if your loan payments are too high is selling the car in order to pay off the loan. A depreciating asset such as a car is not worth your financial future. You have noticed that credit cards have not been mentioned yet. This is because they are low on the priority list if you have those other types of debt. At the most they should receive minimum payments while you work on keeping current and paying off those debts which pose a greater threat to your financial well being. By targeting your most important debts with a proper debt reduction program you can find financial freedom with a little time and patience.