How to Prioritize

[campingmom]

When we get our tax refund we want to use some to pay off debt. Do I spread it out over all of them to get caught up or pay off one entire debt. I am current on most and behind on two.

[ladytoysdream]

Hi and welcome.

Well you would want to get caught up on any you are behind.

If you want to post a list, in general terms of what you are working with,
people here can toss some ideas at you.

Like
credit card one...bal XXXX...interest 19 %
credit card two...bal XXXX...interest 14 %
etc

Just list what you are comfortable with.
You don't have to go into heavy detail.

[Ceashels]

I would definitely get current on the two that are delinquent. Following Dave Ramsey, I would then pay off the smallest cards and get rid of that payment and free up some monthly cash to then throw at the next smallest balance.

As these little balances go away you will have more money to throw at the bigger cards.

Welcome to the Village!!!

[chris w]

I would definitely get current on the two that are delinquent. Following Dave Ramsey, I would then pay off the smallest cards and get rid of that payment and free up some monthly cash to then throw at the next smallest balance.

As these little balances go away you will have more money to throw at the bigger cards.

Welcome to the Village!!!

I agree with Ceashels, after getting caught up if there is any left, list all your debts smallest to largest AMOUNT and work on that list. The only thing I might do differently is if I have $1000 and could knock out 2-3 debts but the monthly payments are low and if I could knock out 1 debt that has a large monthly payment, I may do that to gain more money to throw in the upcoming months. Does that make sense? I had a couple of small debts that the monthly payment was like $100 but another one that had a monthly payment of $300. I knocked the 300 one out and went back and worked on the small ones.

[greekislandgirl]

I tried to answer a post like this once, and everything I thought was right and logical was pointed out to be wrong. I thought it made sense to pay off the ones with the highest interest rates first but it's not so simple, apparently. DR says to pay off the smallest balance first.

Do list your debts here if you feel comfortable doing so.

[MomToTwoBoys]

I would get caught up on the ones that you're behind on first. That will damage your credit more than anything if you continue to allow them to be behind.

After those are taken care of, I would focus on the next one that you can pay off right away (or get the closest to paying off first).

Good luck!

[mombottoo]

Make late payments current first. The rest of my answer would depend on whether or not you have an EF set up yet. If you have no savings put aside for emergencies I would fund that first, then worry about paying down the rest of your debt.

[marjorie]

First I'd catch up, then I'd decide if it makes sense to pay off secured debt first (which I'd probably do if my income were iffy). The highest interest rate next makes sense from a business point of view, but for me paying off the smallest and doig the snowball from there helped to keep me motivated. HTH

[khaski]

My answer is a little different, and depends- how far behind are you on your deliquent accounts? If it is not by much, then catch them up...if you're already months behind, leaving them behind to pay off a current one entirely won't hurt your credit score any more. It would be better to let late ones stay late ones and take care of ones that are current than to pay off late ones only to fall behind on current ones. On the flip side, if you are significantly behind on those 2 accounts it might be an opportunity to settle the debts for a lesser amount than owed if you have cash in hand- but get it in writing before sendig them a penny! Does that make any sense?

[mndtrp]

Taken at face value, with no other information to go on, I would get current on all bills, and then put as much as possible towards the smallest balance. It sounds like you don't have much in the way of cash flow, or else you wouldn't be behind on some cards, so paying things off quickest is the best idea.