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Nowack & Olson, PLLC Florida Bankruptcy Lawyer
  • $0 down and low payment plans available. We can assist you without having to leave your home.

Three Approaches to Debt Repayment Strategy


It is fun, but impractical, to strategize about what you would do if you suddenly got a million dollars.  Most likely, you would pay off your debts and then spend, save, or invest the rest in a way that could prevent you from incurring future debts.  A more practical exercise is to think about what you would do if you had another $50 per month in your budget, which is a real possibility if you finally got around to canceling your gym membership or if you have been sticking to your New Year’s resolution only to buy grocery items for which you have coupons and to get most of your other new stuff from those “buy nothing” groups that have become so popular in South Florida.  The good news is that there is no wrong answer; as long as you put your new budget surplus toward paying down debt, you are doing something right.  To find the debt repayment strategy that works best for you, contact a Miami debt lawyer.

Think Like a Gamer: The Snowball Method

If you approach debt repayment like a video game, you should start at the easiest level, where you put your extra money toward paying the debt with the lowest outstanding balance.  If you do this, you will quickly see the debt get smaller and disappear.  Then you move on to the second level and pay your budget surplus, which is bigger now that you have one less debt payment each month, toward the debt with the next smallest balance.

Think Like an Economist: The Avalanche Method

The avalanche method is an economist-approved strategy where you first calculate how much interest you would pay on each debt by the time it was paid off if you only paid the minimum payment.  Based on the results of this calculation, you put your budget surplus toward the most expensive debt.  It might take longer to pay off the first debt completely than if you used the snowball method, but you will be maximizing your savings on interest.

Think Like a Bankruptcy Lawyer: Prioritize the Debts You Can’t Discharge

Bankruptcy lawyers will tell you to hope for the best but prepare for the worst.  What if you suffer another financial setback and you lose the income that lets you put an extra $50 per month toward debt repayment, or even keep making minimum payments?  In this preparation for the worst strategy, you should focus on paying the debts that a bankruptcy filing cannot discharge, like tax debts, overdue child support, and court-ordered fines.  Once those are paid off, you can snowball or avalanche to your heart’s content until the next financial catastrophe comes along, and if and when it arrives, filing for bankruptcy can make you debt-free.

Work With a Debt Lawyer About Debt Repayment Strategy

A South Florida debt lawyer can help you take the first steps on your path to getting out of debt.  Contact Nowack & Olson, PLLC in Miami, Florida to discuss your case.


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