Pay off Student Loans or add to Mortgage...................

[pamkev]

I'm just dreaming ahead when this is all over with assuming we are a Chapter 7 and not 13 if you had extra money like a tax refund would you pay extra to students loan to get done earlier or pay down mortgage?

Usually the tax refund was to get caught up on bills but assuming everything works out and we can do 7 and have money saved for emergencies which we would you choose to pay off first. I'm leaning towards getting the student loans get them done and out of the way. ( They are parents plus for 2 years and then private loans for dd for the rest I co-signed grrrrrrrrrr lesson learned on that one)


Pam

[helpmeout]

Depends on how soon you are planning on filing. Personally, I would go with the student loans as those are not dischargeable. But I would first check with your attorney to see if the payment would be considered a preferential payment.

[pamkev]

Depends on how soon you are planning on filing. Personally, I would go with the student loans as those are not dischargeable. But I would first check with your attorney to see if the payment would be considered a preferential payment.

Thanks I'm just dreaming when I'm finally discharged. We are hoping to file next month as had to hold off due to hubby's overtime dropping off for the month of Jan. I also think students loan just in case something happens and we can't pay the mortgage anymore we can just walk away. Pam

[ValleYum]

Pam - remember you need to make 24 on-time payments to remove you as co-signer from the student loan. I am not sure whether paying extra would change that (shorten it) or not. Maybe you could call them and ask.

With the economy in such a turmoil, I personally would keep any windfall/extra monies as liquid as possible (savings or a CD) for the near future. Dang old Murphy and his law anyhow!

[HHM]

Generally, and all things being equal, you pay down unsecured debt before secured debt. Reason being, you can usually sell the thing and pay down/off the secured debt if things get bad. So while things are good, you want to get rid of unsecured debt. As such, you would want to devote any extra money to student loans. Moreover, if the choice is student loans vs mortgage, pay down the student loans. Mortgages are the LAST debt that receives extra payment in any sort of debt pay down program.

However, you only start paying "extra" on debt AFTER you are saving at least 10% of your gross monthly income per month.

[pamkev]

Thanks everyone and yes I need money in the bank before I even thing about paying extra on anything. We don't have any extra now to pay on the student loans as we are saving for all those emergenice we used to put on cc. Pam