Faced with a heavy burden of debt, many Tennessee residents understand that they need to sit down and chart out a course of action. For many, devising a debt management plan is a challenge. The entire process may seem overwhelming, and it can be difficult to know where to begin. A powerful starting point for those who have student loan debt in addition to other financial obligations is to determine how to prioritize student loans in relation to other types of debt.
There are cases where paying down student loans should be done prior to addressing other debts. An example is in cases where student loans have high interest rates. Another indication that a student learn should be paid off first is if that loan has a relatively small balance compared to other debts. For individuals who are seriously considering bankruptcy, it may make more sense to pay down student loan debt, as other types of unsecured debts could be eliminated through the bankruptcy process.
In some cases, it makes more sense to pay down other debts in advance of student loans. One example is for borrowers who are looking for flexibility in their student loan payment options. Certain programs allow for non-standard payment plans that could help make the loan more manageable. Individuals who qualify for the Public Service Loan Forgiveness program may also want to hold off on paying down student loans.
Deciding how to approach debt management is a serious matter for many Tennessee residents. One way to ensure that the best possible course of action has been chosen is to work with a trusted bankruptcy attorney. Even if personal bankruptcy is not in one's immediate plan, a bankruptcy attorney can play a powerful role in creating an effective debt management approach.
Source: Forbes, "Student Loans Vs. Other Debt: Find Your Most Powerful Debt Payoff Strategy", Andrew Josuweit, Aug. 27, 2017