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What Types of Debt to Pay Off First

What are my options as a California resident with debt I can no longer repay?

If you can no longer repay your student loan,  credit card debt or other debts, it is not the end of the world. BUT you need to take action. It is difficult, but the sooner you get help, the sooner things will get better. There are several options if you can no longer repay your debt. Which option is best depends on your personal circumstances, such as what type of debt you carry, what assets you possess, and what your monthly income is. Federal student loan debt is much different than a mortgage. As a car loan is much different from a credit card. Do you own your own business and have outstanding business debt as well?
This is why you should consult with a professional before choosing the right option for you. Someone that understands California debt laws, and has experience designing a personal debt relief plan for your specific situation.

What types of debt should I pay off first?

Dave Ramsey famously advocates the debt snowball plan. Basically, the snowball plan tells you to pay off your smallest debts first and your biggest debts last. Ramsey does not advise that you take into account interest rates when making this decision. The plan says to line up your debt, lowest total balance to highest total balance, pay the minimum balance on each card and then give the rest to your lowest balance account until it is paid off. Then you move on to the next lowest.
Suze Orman, another equally savvy financial guru, has completely different advice. She says to determine how much you can pay toward your debt each month. Then, pay the minimum balance on each account, plus an extra $10. After that, put whatever is left in your budget toward the highest interest rate account until that account is paid off. Then move on to the next highest interest rate account.
At McCarthy Law we have a much simpler approach. Get rid of all of your high-interest, unsecured debt at once and do it with an attorney. Our firm will ​represent you against your creditors and work to negotiate a significant reduction in what the bank claims is owed​.