If you’re deep in debt, the idea of paying it off can be scary; depending on your situation, you may have medical bills, credit card bills, and more—all piling up while you were waiting for your structured settlement or annuity to come through. Now that you have a structured settlement to call on, it’s time to pay off debts the smart way; but how do you start?
When you’re trying to get out of debt, you have to make a list of priorities. The best way to figure out which debts are the most important is to look at the amounts you owe, and the interest rates that are attached to them. While interest is a complicated topic, and there are a lot of factors that go into how much interest you pay, the most important thing is to remember that it’s a good idea to pay off the debts that have the highest interest rate first; most likely, the quicker you pay those debts off, the less time and money it will take you to pay off all your debts. If your debts don’t have interest rates, it is also a good idea to tackle the ones with the largest balance first. This way, you can try to get the worst problems out of the way.
Usually, even if your debt is in the hands of a collection agency, there are options for paying these off over time, if you’re not comfortable or able to pay them off all at once. For example, you can pay more than the minimum payment on any credit cards—and give priority to the ones with the highest interest. You can knock out the debt over time by paying some amount above the minimum payment due, instead of floating your entire debt from month to month.
Another possibility is to cash out some of your future structured settlement or annuity payments for a lump sum of cash. If you have big ticket debt—a large bill for the hospital or doctor, for example—then this may make sense for you. Courts will often allow you to take out some of your future money from your structured settlement to do this, but you need to work with a company like DRB Capital to get this done.
The last thing you want is to get more in debt on one credit card while you’re getting rid of debt on another. Figure out what the basics are going to cost you every month, and how much you can put towards your debts, and make decisions based on that information. If that means getting a lump sum of cash for some of your structured settlement payments to get rid of the biggest debts, talk to DRB Capital about your options. Debt is very stressful, but it doesn’t have to be—make the choices that are right for you, and get out of debt—and on with your life.