Under your situation, I would agree a car is a must and the expense is worth it and justified if it allows you to get employment.

The way I look at it is, without a vehicle (at least where I live), there is almost no chance of working. Where I live is far too spread out and there is no real public transportation system. At least with a vehicle, one could seek/continue employment. But as others have mentioned, peoples' circumstances aren't always the same.

Overall I guess either option is not ideal. You are right it probably depends on each person's unique situation and circumstances.

Cents wrote: In a situation where they're forced to choose, I can see why people would tackle credit cards and car loans before worrying about the house. The house may seem like insurmountable debt and the car and credit cards may be more manageable. Also, the house isn't going to do you much good if you can't buy food or get to work. Better to pay off the smaller stuff, stay with family or friends for a while, and get back on your feet with a vehicle and some credit intact.

I agree with your way of thinking on this one. Their credit card bills are probably a lot lower than their home mortgage. What they need to know though is that if they lose their house, their credit score will tank and those credit cards will go away (once they are paid off).

Tough call as you need the roof over your head, food on the table and a means of transportation to go to work in many communities. See your point on overwhelming and follow the concept of the house first. Some of the decisions are personal and very specific to a person's financial status at the time. If you got into one of those questionable mortgages of the early 2000's then it is hard to stay in the house. I got into an FHA ARM that increased 7.5% a year for five years (did not know any better) and had to sell and get out. My wage increases did not come anywhere close to the mortgage and little did I realize the mortgage was only to get the first payments low enough to get me in the door where it almost broke me (fortunate to sell the house for cash and get out).

That unfortunately may not be the best plan. I understand the rationale, but in reality you should pay your house first and credit card last. If you were to end up declaring bankruptcy, you may be able to severely cut your credit card debt (which will hurt your future finances, but you still come out alive!)

In a situation where they're forced to choose, I can see why people would tackle credit cards and car loans before worrying about the house. The house may seem like insurmountable debt and the car and credit cards may be more manageable. Also, the house isn't going to do you much good if you can't buy food or get to work. Better to pay off the smaller stuff, stay with family or friends for a while, and get back on your feet with a vehicle and some credit intact.

Wow, the shocker is to hear that it is going to get worse! Well, I do know for a fact that when you purchase a car, you are going to be upside down regardless, that is why I had a hard time coming out of my 96 neon into a 97 Mitsubishi Galant. I had to put down $5k, so yes hjm, I can clearly understand your concerns. It makes no difference if you plan on paying it off and keeping it, but depreciation is a mother if you are planing on trading off. Don't worry, Toyota's have good resale value, so that sort of helps out.

About the article, I find that strange to hear that people are paying off cars before homes, but at the same time, if they know they are going to loose the house anyway or the home is deep into default, I can understand their reasonings to keep the car and try to pay on their other debt. They need the car to look for a job, take the kids to school, make groceries, and to search for another place to live. We all know that our house is suppose to be our dreams, but all dreams comes to an end and some are made to be shattered. Those who were able to have "Completely" purchased a house are the ones who are blessed. Now humans see that there is a difference between luck, dreams, and money, in comparison to blessings.

My guess young man is that these people realize that the foreclosure process is a long ordeal and they know 2 missed car payments and the repo man will be out to pick up the vehicle.

As far as your upside down loan, depending on the length of your loan, the first half of the loan your upside down in it. Most people at the halfway point in their auto loan try to sell the car because the worth of the car is about what is owed in the loan and they don't take a loss when shopping for a new car

Why would their cars be more important than their home especially when you have a family with kids. If you lose your home, where are you kids going to sleep? In the car? They're not going to have a shelter.

Sometimes, you have to leave selfishness behinds and think about your kids. Also, almost 90 percent of consumers are upside down on their car loan including me. I don't know how that happened especially when I have a Toyota. Kelley Blue Book value for my truck is about $24,000 and I still owe over $29,000.

Please read:

http://www.usatoday.com/money/perfi/credit/2009-04-05-credit-delinquencies-defaults-rise_N.htm

The scary thing about this article is that people now see their Credit Card/Auto loans as priority over their mortgage because their house isn't worth what they are paying on it. Then again as the article states, people will soon fall behind on those loans too......