Which Debt Should You Pay Off First?

Got debt? Most of us do. Sometimes people fall behind on their payments or rack up more debt than they intended. If you’re struggling to pay bills, you might need to consider debt relief. 

Even if you’re on time with your payments and totally on top of managing your debts, it’s great to figure out a plan to pay off your debt. You may be wondering which debts you should pay off first—and that’s a very good question. 

Start by assessing your situation. If your debt is out of control, make a plan and understand which debts to pay off first. Sometimes, getting started is the hardest part. Just the act of planning and mapping out a clear process for which debts to pay off first, second, and so on, could get you started on a better path. Making a decision about which debts to get started on can feel motivating and empowering. It gives you a clear course to get rid of debt faster. 

Before starting your debt repayment journey, choose the debts to pay off first and decide on a debt repayment strategy. If you have delinquent debts, like unpaid credit card bills, delinquent federal student loans, or overdue payments on your mortgage or auto loan, address those debts first. 

Prioritizing Delinquent and High-Risk Debts

Delinquent accounts should be at the top of your list, because these types of debts could hurt your credit score and could in some cases result in a lawsuit against you.

Secured debts (like an auto loan or mortgage) that are in delinquency are also priorities. An auto loan or home mortgage that goes unpaid for too long could mean a car repossession or a home foreclosure.   

One more urgent debt priority: tax debt you owe to the government. Unpaid tax debt could mean owing additional interest and penalties, and tax debt can’t be discharged in bankruptcy. If taxes go unpaid too long, the government can put a tax lien on your home or other property. 

Unpaid tax debt could bring severe and painful problems. Government authorities are easier to work with if you communicate with them upfront. Tax debt has many solutions that could fit your budget and help you move on with your life.

If you’re going through financial hardship like a serious medical problem, lost job, long-term unemployment, or death or disability of a spouse or main breadwinner, it’s even more urgent to prioritize your debts. To decide which debt you should pay off first, ask yourself if this unpaid debt could: 

• Cause you to lose your home or property? If you’re delinquent on your home mortgage or auto loan, prioritize these debts first so you don't lose your home or vehicle. 

• Get you in trouble with the government? If you owe money to the IRS or state tax authorities, put that on the top of your list.

• Be handled in other ways, like debt relief? Some debts, like credit card debt and unsecured personal loans, can be negotiated and resolved with debt settlement programs or other debt relief options. If you have several unpaid debts, you might want to put your credit card debts on the back burner and focus on keeping your home and car.    

People who don’t have delinquent debts, whose credit card bills are getting paid (mostly) on time and in full, still need to decide which debt to pay off first. Getting organized and making a debt payoff plan could help you save money on interest and fees, get rid of debt faster, and gain peace of mind as you build a brighter future. 

There isn’t any one best way to get rid of debt. But the best time to start is: right now.

You May Like These

What Are Veteran Debt Relief Grants?

Debt Relief Programs: How They Work and What to Look For

Is Severance Pay Taxable? How Job Loss Affects Your Taxes

How to Choose Which Debt to Pay Off First

Many people choose to start with either the most expensive debt or the smallest outstanding balance. 

For example, if you have three credit cards with interest rates of 25%, 27% and 29%, you might want to pay off the highest-interest card first. Or if you have an auto loan with $2,500 left on it, and $5,000 each on two of your credit cards, you might decide to pay off the smallest balance first—even if it’s at a lower interest rate. 

It’s not always easy to decide which debt to pay off first. To make this choice, you need to understand the type of debts you have, their costs, and outstanding balances. Gather all your debt information, including mortgages, student loans, auto loans, personal loans, and credit cards. 

Type of debt

One way to choose which debt you should pay off first is to look at your types of debt—whether your debts are secured or unsecured. 

Secured debt 

With a secured debt, the loan is secured by an asset. You offer something of value that you own to the lender to get the loan. The asset that secures your debt is also known as collateral. Home mortgages, home equity loans and lines of credit (HELOCs), and auto loans are common examples of secured debt, because the loan is secured by a home or a vehicle. 

Secured debts often have lower interest rates than unsecured debts because the collateral is a financial safety net for the lender. If you fail to repay a secured debt, the lender could take steps to seize your asset and sell it so they get paid back. 

For example, mortgages are secured by the home, a valuable asset. If you can’t pay your mortgage, and your loan goes into delinquency, the lender has the right to foreclose on your home, seizing the property from you and selling the home at a foreclosure auction to repay the money you borrowed. 

Since lenders can take your property if the loan goes unpaid, they’re taking on less risk with secured debts. When lenders are confident that they won’t lose money, they’re more likely to lend money. Having security on the debts is also why auto loan interest rates and mortgage rates are much lower than credit card rates—lenders can offer you cheaper money when they know they’re protected against the risk of not getting paid. 

Unsecured debt 

Unsecured debt has no collateral or security for the lender. With an unsecured debt, the lender has no asset securing your loan (such as a house or car). Instead, an unsecured debt is issued based on your promise to repay. Examples of unsecured debt include personal loans, student loans, or traditional credit cards. 

Lenders offer unsecured debt based on your creditworthiness, which is determined by your credit score and other factors like your debt-to-income ratio. To get an unsecured loan or credit card, you don’t have to offer anything of value to the lender as collateral. Unsecured debts can be a pretty good deal for consumers—because you get access to loans without having to risk losing your property. Unsecured debts also have other costs and risks for the borrower. 

You’ll likely pay higher interest rates for certain unsecured debts like credit cards because they present a higher risk for the lender compared to secured debts. With unsecured debts, lenders could have more difficulty recovering any unpaid amounts. 

Unsecured debts won’t result in the loss of your home or car, but they could still mean lots of interest and fees. Unsecured debts, left unpaid, could also damage your credit score and lead to creditors filing lawsuits against you.  

Which debts should you pay off first: secured or unsecured? 

Whether to pay off secured or unsecured debt first depends on what helps you sleep better at night and feel most in control of your finances. It also depends on how you feel about losing money on interest payments. Some people might feel better owning their car free and clear, so they pay off their 7% auto loan faster, even though they still have credit card debt at 25%. The best financial move is not always the best one for your emotions and your peace of mind, and that’s fine. 

In general, secured debts cost you less money than unsecured debts. And secured debts (like auto loans and mortgages) tend to be installment loans where the payment is the same amount every month and the debt doesn't get bigger over time. Unless you have an unusually high interest rate on an auto loan or bought a home during when mortgage rates were high, no need to be in a huge hurry to pay off secured debts faster. 

Secured debts could be beneficial for your financial health, because they can be good debts that let you use low-interest debt strategically. They give you time to pay off big purchases and  a higher quality of life today (a nicer car, a bigger house) while extending the payments into the future. And low-interest secured debts could help free up money in your budget so you can do other things, like invest for the future. 

If you have unsecured debts like credit card debt, the interest rate is probably much higher than your mortgage or auto loan. If you don’t pay off your balance in full each month, or if you only make minimum payments, credit card debt can actually get bigger over time, because the interest grows and compounds. In this way, unsecured debts can be riskier for your financial health.

Some times when it’s a good idea to pay off secured vs. unsecured debt first are if you: 

• Are delinquent on your secured debts. Talk to your lenders and make a plan to address your unpaid debts. Even if you have to leave other unsecured debts unpaid or pay just the minimums, you don’t want to lose your home or car. Keeping your home or car is generally a higher priority than paying off credit cards.

• Have a low interest rate on secured debts and a much higher rate on unsecured debts. Pay off the unsecured debts first, as long as you also keep making the full required payments on your secured debts. Paying down your high interest unsecured debts will help you save more money in the long run.

• Are delinquent on your unsecured debts but on-time with secured debts: Keep paying your secured debts on time to avoid foreclosure or repossession. Talk to your creditors about your unsecured debts about creating a repayment plan. Unsecured debts could be negotiated with debt settlement programs and could be discharged in bankruptcy. You have options for getting rid of overdue unsecured debt that won’t mean losing your home or car.  

In general, if you’re in good financial health and can afford to make all of your monthly debt payments, it usually makes sense to pay off the highest-interest debts first—and that means paying off unsecured debt first. If you have a financial hardship and are falling behind on your bills, try to prioritize secured debts so you hold on to your home and car, even if you have to look at other debt relief options for your unsecured debts. 

Cost of debt 

A big factor in deciding which debts to pay off first is the cost of debt. The best way to measure your cost of debt is to look at your interest rate for each debt. 

Your annual percentage rate (APR) lets you calculate how much the debt will cost for one year. The rate includes your debt’s interest rate and fees, so on your mortgage, for example, the APR might be slightly higher than the interest rate. You don’t have to worry about complicated calculations. Just write down the interest rate for each debt so you’ll know which ones will cost you more over time.

Outstanding balance

Know how much you owe each creditor, and list the minimum monthly payment for each debt. 

Your credit card statements will tell you your minimum payment. As you pay down your balance, your minimum payment will also go down—and if you pay that lower amount, it’ll take longer to pay off the debt. It’s a good idea to stick with the same monthly payment, even if you’re allowed to pay less. 

Installment loan minimum payments don’t change as you get closer to payoff.

Debt Payoff Strategies 

Once you know the details of your debt, choose a debt repayment plan that suits you.

Let’s assume you have the following credit card debts:

Here’s how you could use different repayment strategies to decide how to pay off these credit card debts.

Debt snowball: the smallest debt first 

With the debt snowball strategy, you pay off your smallest debt balance and work your way up to the largest balance. The debt snowball method won’t save you as much money on interest as you'd save by paying off your highest-interest debts first—but it has powerful psychological benefits. It feels good and empowering to watch that first (small) debt balance go to zero. Paying off your first debt quickly could motivate youn to keep going. 

Here’s a step-by-step guide of how to use the debt snowball method: 

• Say you have three credit card debts in the example amounts listed above. The smallest balance (credit card C) is $5,000 with a minimum payment of $100. 

• You crunch the numbers in your budget and cut back on extra spending and find that you can afford to pay an extra $500 per month toward your debts on top of the minimum payments.

• Keep making minimum payments on your other two credit card debts. You’ll get charged extra interest in the short run, but that’s fine—you’re making progress on a plan to pay them off soon. 

• Pay an extra $500 per month on your smallest debt (credit card C), on top of the $100 minimum. Now you’re paying a total of $600 per month toward that original $5,000 balance. 

• After 10 months, your smallest debt (credit card C) is paid off. 

• Now you have an extra $600 per month to pay toward your next-smallest debt. 

Pro tip: Remember to make minimum payments on all your debts. Your payment history is the most important item in your credit score calculation. And paying on time means avoiding late payment fees. 

We call this the debt snowball method because it lets you build momentum starting from a small amount, just like rolling a snowball around in the yard. Over time, the momentum gathers and grows. 

Here are a few types of people and debt situations that might be a good fit for the debt snowball method: 

• You aren’t sure where to begin. Sometimes it’s best to start small. The debt snowball method lets you start with your smallest debt and build from there. Taking the first step to pay off your first small debt, even if it’s only a few hundred dollars, could empower you to make even bigger plans. 

• You want quick rewards and signs of progress. Paying off debt over several years might feel too far away. The debt snowball method gives you a chance to enjoy some quick wins and low-hanging fruit. You might feel more motivated about paying off debt if you feel that surge of accomplishment from wiping out your first small balance. 

• You don’t care about counting and tracking interest charges. Some people love spreadsheets and calculators to figure out exactly when they’ll be free from debt and how much they’re saving on interest. If you’re less passionate about those math details and just want to take action to start paying off debts right now, the debt snowball method could be simpler and more energizing for you. 

Debt avalanche: the highest-interest first 

A debt avalanche has you pay off your debts starting with the one with the highest interest rate. The reasoning: you want to first get rid of debt that’s costing you the most. If you can pay off the highest-interest debt first, this will unlock more money to put toward your lower-interest debts. The debt avalanche method is also called debt stacking, because it stacks payments from the top down, from highest- to lowest-cost debts. 

Based on the example credit card debts from the table above, here’s how the debt avalanche strategy works: 

• Keep making minimum payments on Card B (19%) and Card C (22%). 

• At the same time, you’ll put every spare dollar to Card A, because it has the highest interest rate (24%). 

• Let’s say you find an extra $500 in your monthly budget and you can afford to pay off debt at $500 per month beyond the minimum payments. You’ll pay Card A’s minimum payment of $400 per month plus $500, for a total of $900 per month. 

• After 30 months, Card A is paid off. 

• Keep making minimum payments on Card B (19%). Now, you would focus on paying off Card C (22%), the next highest-interest rate debt. You’ll have an extra $900 to put toward that debt, on top of the minimum payment of $100, for a total of $1,000 per month. 

• Once you pay off Card C, it’s time to tackle the last balance (Card B at 19%).   

You may be wondering whether the  debt snowball or debt avalanche is better. Based on the  credit card debt examples we used with a total $35,000 debt amount, assuming monthly payments of $500 beyond the minimum payments, here’s how much time and money you could save by using each method: 

• Debt snowball: 44 months to pay off debt; total payments of $51,606.99

• Debt avalanche: 42 months to pay off debt; total payments of $50,172.14

Source: Debt Destroyer calculator, finred.usalearning.gov 

In this case, using the debt avalanche method would save you $1,435 and get you free from debt two months faster. Paying off the most expensive debt first helps you lower your overall costs. If you have a large amount of high-interest debt, the debt avalanche method might mean it takes longer before you reach the first payoff.

We call this method the debt avalanche because it starts slowly and quietly, but then suddenly builds strength and speed, just like an avalanche coming down a mountain. It might take a bit more time to pay off your higher-cost debts first, but eventually you could get powerful results—and you’ll save on interest.  

Here are a few types of people and debt situations that might be a good fit for the debt avalanche method:   

• Your biggest debt is also your highest-interest debt. If you have one credit card that has a much higher balance and an especially high interest rate compared to your other debts, the debt avalanche method could be a good way to tackle that higher-cost debt first.

• You’re patient and detail-oriented. If you enjoy the process of saving money and paying off debt, the debt avalanche method could work best for you. If you understand the rewards of getting rid of high-interest debt, you’re committed to getting rid of debt, and you’re willing to wait a few months or years for that first balance to go to zero, this debt payoff strategy could pay off for you. 

• You hate losing money on interest charges. If you’re tired of being in debt and you dislike the feeling of spending money every month on previously-spent money, use the debt avalanche method. It’s guaranteed to save you more money on interest compared to the debt snowball method.   

Debt consolidation loan

Debt consolidation uses one loan to pay off multiple loans or credit cards. With debt consolidation, you combine multiple debts or credit card balances in one place, often at a lower interest rate. Paying off a debt consolidation loan could simplify your finances.  

This method could also save you money if the new debt consolidation loan’s interest rate is lower than the interest rates that you were already paying on your debts. Your debt consolidation loan interest rates will typically depend on your credit history. 

There are several ways to consolidate debt.

Personal loan

When you get a personal loan for debt consolidation, a lender will offer you an interest rate based on your credit score and the debt amount you want to consolidate. If your credit is fair or better, personal loans could help you save money on interest vs. credit cards. 

For example, if you have three credit card debts at 25% for a total balance of $12,000, you might be able to get a debt consolidation loan to pay off the credit cards and combine that $12,000 under one new personal loan at a lower interest rate. Personal loans are typically unsecured debts, so you could use this debt consolidation option to get a lower-interest loan without having to risk losing your assets or property.

Let’s look at a few pros and cons for using a personal loan for debt consolidation. 

Personal loan advantages:

• Lower interest rate than credit card debt 

• Could simplify your finances by giving you one monthly payment instead of multiple bills

• No collateral—you’re not at risk of losing your home or car 

Personal loan drawbacks: 

• The debt doesn’t go away—it just gets rearranged under a new loan account 

• You might be tempted to spend more money

• Interest rate might be higher than you could get with a home equity loan  

Home equity loan 

Home equity is the difference between what your home is worth and your mortgage balance. It’s like an invisible savings account inside your home that grows each month as you pay down your mortgage. For example, if your home is worth $350,000 and your mortgage balance is $200,000, you have $150,000 in equity. 

When you take out a home equity loan or home equity line of credit (HELOC), it’s like taking out a second, smaller mortgage. Home equity loans let you borrow against some of this stored-up value of your home, and turn your home into temporary cash. 

With a home equity loan, you ask a lender to agree to lend you money based on the available value of the home. Just like your home mortgage, home equity loans are secured debts.The debt is secured by collateral, in this case your home. THome equity loans are typically lower-interest compared to credit cards or most personal loans. 

Let’s look at a few pros and cons for using a home equity loan for debt consolidation. 

Home equity loan advantages:

• Lower interest rate than credit card debt or most personal loans

• Flexible loan terms and loan amounts, especially if you use a HELOC 

• Your home might have gone up in value in recent years, which could let you access cash  

Home equity loan drawbacks: 

• If you can’t repay the loan, your home could be at risk of foreclosure 

• You might be tempted to spend more money 

• More home mortgage debt means more time until you’re free and clear as a homeowner

Credit card balance transfer 

If your credit is fair or better, you might want to consider a credit card balance transfer to consolidate debts and pay off debt faster. Some balance transfer credit cards offer zero interest or very low interest for a limited period of time, typically 12 to 18 months. With a balance transfer card, you open a new credit card and transfer balances from other cards onto this new account. 

Some cards charge balance transfer fees of 3% to 5% that add some costs to this process. Usually, trading 20% to 25% interest rate credit cards for a 0% interest card is a good deal and could help you save money on interest. If you’re not paying interest, your entire payment will lower the balance you owe and you could get rid of debt sooner. Be careful how you use balance transfer credit cards. As soon as the introductory promotional period ends, the low interest rate will jump up to the regular rate.

Let’s look at a few pros and cons of using a credit card balance transfer for debt consolidation. 

Credit card balance transfer advantages:

• Lower interest rate than other credit cards or personal loans (especially if you get a 0% introductory interest rate)

• Easy to apply if you have fair or good credit 

• Unsecured debt—your home, car, or other property— at risk  

Credit card balance transfer drawbacks: 

• Introductory 0% interest rate goes away after a certain time; watch out forf higher costs and fees 

• You might be tempted to take on more credit card debt 

• People with lower credit scores might not qualify for the best balance transfer credit cards

Pro tip: When you apply for a new credit card, lenders look into your credit history. This will probably make your credit score go down for a while. Some lenders offer prequalification with a soft inquiry, so you can check out your options without it showing up on your credit report or affecting your credit score.

Debt consolidation might be a good decision for people in the following situations: 

• Multiple high-interest debts 

• Want to simplify your debts with a single more affordable monthly payment. 

• Can qualify for a lower-interest debt consolidation loan or balance transfer credit card 

• Own a home and have built up enough home equity to qualify for a low-interest home equity loan or HELOC 

Debt consolidation isn’t the right choice for everyone. Debt consolidation might not be right if you: 

• Have delinquent debts and are already getting contacted by debt collectors 

• Have experienced serious financial hardship and your credit score has already taken a hit from unpaid bills or overdue debts 

• Don’t own a home (can’t use home equity loans) 

• Want to cut yourself off from spending more money and taking on more credit card debt; you’d rather just pay off debt at the higher interest rates 

• Have a total amount of debt that feels impossible to pay off, and you’d rather look for options to get debt relief 

Debt consolidation could leave you better off and help you get rid of debt faster. Debt consolidation could also lead to new problems for some people and some financial situations. Here are a few common mistakes to avoid with debt consolidation: 

• After a debt consolidation loan or balance transfer, you keep your credit card accounts open and use the cards to spend more money and take on more debt.

• After a credit card balance transfer, you forget to pay off the debt before the end of the introductory 0% period.

• For people with fair to poor credit scores, some personal loans charge such high interest that it’s not much of a difference. You might be better off just paying down your credit cards.  

• You take out a home equity loan to pay off your credit cards, and then fall behind on your home mortgage payments, putting you at risk of foreclosure.  

Alternative Debt Payoff Methods

In addition to debt snowball and debt avalanche, you’ve got other  ways to pay off debt faster. The right debt payoff method depends on your financial priorities, your style of managing money, and what's most important for your peace of mind. Here are a few other debt payoff strategies to consider:  

• Debt by type. Start by paying off certain types of debt, like credit cards first, then auto loans, then student loans. 

• Highest payment. Start by paying off the debt with the highest minimum monthly payment, and go downward from there. 

• Credit score impact. If you want to boost your credit score, pay attention to your credit utilization ratio. For example, if you have a credit card with a limit of $10,000 and a balance of $5,000, you might want to pay down that balance first, to get it below the 30% utilization ratio. 

• Emotional impact. Which debt feels best to pay off first? Even if it costs you some extra interest, it could be worth it if it's emotionally satisfying to pay off a certain credit card or car loan faster. 

• Hybrid/balanced or blizzard approach. Instead of a snowball or avalanche, consider the blizzard. Start paying off debts however it makes sense to you. Pay extra toward two debts at once, or make minimum payments on your smallest debt, and pay extra money toward the others. There’s no single right answer as long as you stick to your plan and your debt balances get smaller.  

Don’t feel like you absolutely must use the debt snowball or debt avalanche method. You’re free to customize debt payoff strategies based on your specific situation and your most meaningful goals. Just like starting a fitness routine, the best debt payoff plan is whichever plan you’ll  find satisfying, commit to, and stay motivated to stick with. 

Some people might want to avoid some debt payoff methods: 

• Balance transfers. If you’re already struggling with overspending and negative events in your credit history, opening a new credit card (even with 0% interest) could be risky. The introductory period timeline may be too short for some people to pay off all their debt, and there’s a strong chance of ending up with more credit card debt. 

• Minimum payments only. Paying only the minimum on your credit cards is a recipe for racking up lots of interest charges and staying in debt for a long, long time. Whichever debt payoff plan you choose, make sure you pay more than the minimum. If you can’t afford more than the minimums, you might want to consider professional help like debt relief. 

• Using retirement funds. Even if you’re going through financial hardship, it’s best not to dip into your retirement savings to pay off credit card debt. In serious situations, you could get rid of credit card debt  through debt relief or bankruptcy. There’s no way to bail out your retirement savings. Leave your retirement accounts alone and let that money grow for your future.  

• Paying debts randomly without strategy. No matter what debt payoff plan you choose, try to be focused, organized, and deliberate in paying off debt and watching your progress. If you just throw a few hundred dollars here and there or use a scattershot approach, you might lose motivation and get discouraged. Any plan is better than no plan. 

Pros and cons of debt repayment strategies

Which debt repayment method should you choose?

The best debt repayment strategy for you depends on the best fit for your personal finances and your overall personal style of managing money. Choose the method that feels best to you so you’ll be more likely to follow through. 

If you stay disciplined, the debt avalanche method might be a good option because of the cost savings. 

For some people, the debt snowball method works the best. Getting to the first win quickly could help you keep going.  

If you’re overwhelmed with debt payments or having a hard time tracking multiple debts, debt consolidation might be an ideal strategy. It’s a good option if you can lower your overall interest charges. 

Creating Your Debt Payoff Plan

Now that you know the ins and outs of the best debt payoff plans, it’s time to take action and set up your own clear plan for getting rid of debt. Here’s a quick step-by-step guide for creating your debt payoff plan:

1. List and organize all your debts. Get the latest balances on your credit cards, log in to your loan accounts, and get all the information in one place. Use a notepad or spreadsheet (or both). Get a clear number for the total amount of debt that you have, the different accounts and balances, and all the interest rates and minimum payments. 

2. Use tools and debt calculators to help with planning. There are excellent free apps available to help you with budgeting and paying off debt. The Achieve GOOD (Get Out Of Debt) app is a free app that connects to your bank accounts with your permission. Undebt.it is another free website with easy-to-use debt calculator tools. The best credit card debt apps could help you visualize your monthly spending, crunch the numbers, and figure out how soon you can shut the door on debt. 

3. Set realistic timelines and goals. Getting clear of debt doesn’t happen overnight. You might need many months or several years of steady, disciplined progress to pay off debt. Try to be patient with yourself, and don’t feel bad if it takes longer than you expected. Debt calculators can help you estimate how long it will take to pay off your debts. 

4. Adjust your budget to accelerate debt payoff. Once you have a clear picture of your debt payoff plan, you might feel motivated to take a fresh look at your monthly spending. If you can find an extra $100 or $200 in your monthly budget, you might be surprised at how much faster you might be able to get rid of your debt. 

5. Track progress and stay accountable. Whether you use a debt snowball, debt avalanche, or some other customized debt payoff plan, keep your eyes on the prize. Keep track of your debt balances as they go down. Try to make extra one-off debt payments if you find additional cash in your budget. And celebrate your wins along the way. Staying motivated, focused, and accountable to yourself is a big part of a successful debt payoff strategy. 

How to Pay Off Debts in Collection

Are you getting contacted by debt collectors? Don’t worry. You can negotiate with collection agencies to reduce your debt.   

If you haven’t paid your loans or credit cards in several months, your debt might be with a collection agency. This happens to many people. If debt collectors are bothering you, there are different ways to deal with collection agencies. 

Anyone can negotiate with their own creditors. If you’re not comfortable doing so, you could hire a professional debt settlement company to help you. 

Start sooner rather than later. Sometimes it’s possible to settle your debt after a lawsuit is filed but it can be easier to negotiate before a judgment is in place.