 TITLE: Is It Better to Pay Off Debt or Settle It? CONTENT: How to Start Paying Off Debt\n----------------------------\nYou have many options to pay off debt that isn't already in collections. Start out by getting clear on how much you owe and how much you're paying in interest on each debt. If you have the money to pay extra on your accounts to reduce their balances, try paying down the debts with the highest interest rates first (using the debt avalanche method); you can also pay off the smallest debts first (using the debt snowball method) if that will help keep you motivated to pay off your debts.\nIf you'd prefer to simplify your debts and potentially reduce their interest rates, look into a debt consolidation loan, which lets you combine multiple accounts into one and make a single set monthly payment to pay them off. A balance transfer credit card may also be an option if you qualify. These cards allow you to consolidate credit card debt with a single card and pay it off at 0% interest for a period of time.\nDebt already in collections requires specific payoff strategies. First, contact the lender and explore your options for making a lump-sum payment to settle the debt or creating a payment plan to pay off the debt. If the creditor has sued you to get back the amount owed, it's a wise choice to hire a lawyer to help. A nonprofit credit counselor can also give you advice on the best way to handle a debt in collections, and on which payoff strategies make the most sense for your finances. END