Credit Card Debt or Student Loan Debt: Which to pay off first?

September 23, 2014 Posted by kingcade

It is important to first realize, that all debt is not created equal. Some debt can actually work for you. For example, debt that is tax deductible, such as mortgage and student loan debt falls into the category of “good” debt. On the other hand, debts like credit card debt and car loans fall into the “bad” debt category.

Student loans offer fixed rates and tax deductible interest. You should not be in a rush to pay these off, particularly if you are not already saving adequately for retirement and other emergencies. Federal student loans offer the opportunity to reduce or even suspend payment without damaging your credit scores if you face financial difficulty and have the possibility of forgiveness. Those options are not available for credit card debt.

If your student loan payments exceed 10% of your income when you enter into repayment, the federal government  has a “Pay as you Earn” program, which offers more manageable payments for borrowers, especially those with large amounts of debt.

For borrowers who are struggling with student loan debt, relief options are available. Many student loan borrowers are unaware that they have rights and repayment options available to them, such as postponement of loan payments, reduction of payments or even a complete discharge of the debt. It is important you contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia website at

Related Resources:

Comments are closed.