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What would you pay off?

post #1 of 32
Thread Starter 
We have $3800 we can use to pay off some debts, but we're not sure which to pay off. These are our options:

Credit Card #1 - balance $2,024 - minimum payment $102
Credit Card #2 - balance $1,020 - minimum payment $80
Credit Card #3 - balance $445 - minimum payment $15
Credit Card #4 - balance $410 - minimum payment $15
Student Loan - balance $1,134 - minimum payment $169
Motorcycle - balance $741 - minimum payment $93
Medical Bills - we have a total of about $4,000 for which we are paying about $350/month

The best thing for our budget would be to pay off the medical bills. There are about 15 different accounts we're paying on, and a few of them have turned us over to collections. We're having to pay the $350/month to avoid more of them turning us over.

BUT paying off my student loan & another high-minimum debt would also be really helpful for our budget.

Then there are the credit cards, which have such high interest rates (over 20% on all three of them). We don't have enough money to pay off all of them, but paying off the two big ones would be such a relief.

Keep in mind that I just quit my job, so less money each month going out to bills is a very good thing.

What would you pay off?
post #2 of 32
if it were me, i'd pay the medical bills, since some are going to collections. they may even settle with you for less since you are paying in full
post #3 of 32
No question, I'd pay off the credit cards first. It'll save you money in the long run. 20+% interest rates on credit cards will keep you in debt forever if you're not paying them off as fast as possible. Is there an interest rate on the medical bills? If not, I'd pay them off slow and work on paying off as much as possible on credit cards (assuming that's a possibility). Credit card companies give "minimum" payments as a way of tricking you into carrying a balance and ultimately paying more for what you bought.

You might consider trying to consolidating the medical bills... sometimes you can get a lower payment, if that's necessary.
post #4 of 32
Thread Starter 
There is no interest on the medical bills and fairly low interest rates on the student loan & motorcycle.
post #5 of 32
Personally, I think if there's no interest on it, then it can wait for you to pay off what DOES have interest. My Dh and I focus on paying by order of interest rate. I'm sure other people have reasons for doing it other ways, though.
post #6 of 32
pay the debt with the interest rates(the really high ones)
post #7 of 32
Call your cc companies and ask for a lower interest rate, if they balk tell them you're thinking of transferring the account, most of the time you can do much better on your interest rate.

I'd pay the medicals but only the ones about to hit collection, if they're not hitting collection, then the ccs.
post #8 of 32
[QUOTE=becoming;10921759]We have $3800 we can use to pay off some debts, but we're not sure which to pay off. These are our options:

Credit Card #1 - balance $2,024 - minimum payment $102
Credit Card #2 - balance $1,020 - minimum payment $80
Credit Card #3 - balance $445 - minimum payment $15
Credit Card #4 - balance $410 - minimum payment $15
Student Loan - balance $1,134 - minimum payment $169
Motorcycle - balance $741 - minimum payment $93
Medical Bills - we have a total of about $4,000 for which we are paying about $350/month

[QUOTE]


I would pay off the Student Loan first. If something came up and you couldn't make payments on the student loan, the govt can garnish your wages. Then I would pay off credit cards 3 and 4. That would leave you 1,811. I would then pay off the motorcycle. That would leave you 1070. If you don't have an emergency fund, I would use that $$ for an emergency fund. If you have the emergency fund, then I would pay off cc#2 and put the last $50 towards cc#1.

With this plan, you eliminate 5 monthly payments, totaling 372!
post #9 of 32
[QUOTE=ArtsyMomma;10921945][QUOTE=becoming;10921759]We have $3800 we can use to pay off some debts, but we're not sure which to pay off. These are our options:

Credit Card #1 - balance $2,024 - minimum payment $102
Credit Card #2 - balance $1,020 - minimum payment $80
Credit Card #3 - balance $445 - minimum payment $15
Credit Card #4 - balance $410 - minimum payment $15
Student Loan - balance $1,134 - minimum payment $169
Motorcycle - balance $741 - minimum payment $93
Medical Bills - we have a total of about $4,000 for which we are paying about $350/month

Quote:


I would pay off the Student Loan first. If something came up and you couldn't make payments on the student loan, the govt can garnish your wages. Then I would pay off credit cards 3 and 4. That would leave you 1,811. I would then pay off the motorcycle. That would leave you 1070. If you don't have an emergency fund, I would use that $$ for an emergency fund. If you have the emergency fund, then I would pay off cc#2 and put the last $50 towards cc#1.

With this plan, you eliminate 5 monthly payments, totaling 372!
And *then* take the payments from that and pay off the other credit cards and then the medical debt asap.
post #10 of 32
I would snow ball it and also apply for a hardship deferment on the student loans.
post #11 of 32
No question, I'd pay off the ones with the highest interest rate first. It makes the most sense financially to stop accruing interest. Then, take the money that you've been paying on those accounts that you pay off and apply it to the next highest rate one until that's paid off, etc.
post #12 of 32
I would pay off anything in collections, or in danger of going to collections first.
The main reason for this is because collection agents are scum, and will harass you until you pay, or they may take you to court for a judgement if they don't like how fast you are paying.

Then I would use the rest (if any), to pay on the highest interest cc's.
post #13 of 32
Do you already have an emergency fund in the bank?
post #14 of 32
Thread Starter 
We do have an emergency fund. Actually we're keeping a little over $2K in our savings account.
post #15 of 32
I think I would pay off the 4 credit cards first, and then snowball that extra $217 towards the motorcycle, and when that is payed snowball it all towards the student loan. Then I would work on the medical bills since they do not have any interest.

Most importantly here, I would look at anything you pay off leaving you the extra payment $ to do something else with. Keep using it to pay off your other debts so you can eliminate them that much faster.
post #16 of 32
I'm torn. The medical debts in collections would be an issue for me. WHy not look at the individual medical debts and maybe pay some of them that are in collections along with the CCs, and then snowball payments from this point on since you are likely to find a whole lot of extra
post #17 of 32
[QUOTE=ArtsyMomma;10921945][QUOTE=becoming;10921759]We have $3800 we can use to pay off some debts, but we're not sure which to pay off. These are our options:

Credit Card #1 - balance $2,024 - minimum payment $102
Credit Card #2 - balance $1,020 - minimum payment $80
Credit Card #3 - balance $445 - minimum payment $15
Credit Card #4 - balance $410 - minimum payment $15
Student Loan - balance $1,134 - minimum payment $169
Motorcycle - balance $741 - minimum payment $93
Medical Bills - we have a total of about $4,000 for which we are paying about $350/month

Quote:


I would pay off the Student Loan first. If something came up and you couldn't make payments on the student loan, the govt can garnish your wages. Then I would pay off credit cards 3 and 4. That would leave you 1,811. I would then pay off the motorcycle. That would leave you 1070. If you don't have an emergency fund, I would use that $$ for an emergency fund. If you have the emergency fund, then I would pay off cc#2 and put the last $50 towards cc#1.

With this plan, you eliminate 5 monthly payments, totaling 372!
Quote:
Originally Posted by mum4boys View Post
I would snow ball it and also apply for a hardship deferment on the student loans.
I'd pay high interest things first and work out a plan for the others. It's been awhile, but my experience with student loans is that if you contact the lender, they'll work with you--there are all kinds of hardship deferments. As someone pointed out, paying just the minimum on a CC with 20% interest doesn't get you anywhere. The debt will drag around forever.
post #18 of 32
Pay:
Credit Card #4 - balance $410 - minimum payment $15
Credit Card #3 - balance $445 - minimum payment $15
Student Loan - balance $1,134 - minimum payment $169
Credit Card #2 - balance $1,020 - minimum payment $80
Motorcycle - balance $741 - minimum payment $93

Total $3750
frees up $372 per month
Add that to the medical bills and you will be done with those in less than 6 months. A bit more than 2 months after that and you will be debt free.

Keep up payments on:
Credit Card #1 - balance $2,024 - minimum payment $102
Medical Bills - we have a total of about $4,000 for which we are paying about $350/month
post #19 of 32
I would pay off the student loan + the first 2 credit cards. With those monthly minimum payments gone ($351) it's equal to the relief you'd feel if you paid of medical bills (monthly payment wise). You now have an extra $350 a month to contribute to your medical bills. That's a total of $700 which will get your med bills paid off in 5 months.

Once the med bills are gone you can get rid of that bike payment in under a month, and knock out the 2 credit cards the month afterwards. In theory. haha.
post #20 of 32
Ok, then I'd do everything but Credit card #1 and the medical bills.
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