Pelley Law Office LLP
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Who should I pay first?

Typically yourself, unless you have credit card debt.  Although the answer to that question might be different for one family than it is another, and it is certainly a case-by-case basis type question.

It is often wise to contribute to an IRS qualified retirement plan first.  Even though we are obviously in a bad recession, traditionally a 401k or similar plan has shown to grow steadily over time.  If your employer will match a certain percentage of your salary, its typically a good idea to contribute at least that amount.  Plus, if you are sued later or have to file a bankruptcy, that money is exempt under the Bankruptcy Code and Texas Property Code.

But before you start making a decision on who you should pay first, you should certainly consult with an accountant, financial planner, financial lawyer or bankruptcy lawyer.   To determine which one of those you should see first, go buy at $3.00 calculator.

Add up your credit card debt.  Multiply the amount of the debt by your average interest rate (i.e. $20,000 with a 15% interest rate on average just multiply 20,000 by .15).  Then divide that number by 12 for the number of months.  That is the amount you are being charged in interest each month.  If that monthly number is more than $250 a month, then you need to see a bankruptcy lawyer first.

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Plano office
Sherman office
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Plano Office
1312 14th Street, Suite 100
Plano, Texas 75074

Phone: 972-608-0335
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Sherman Office
905 North Travis Street
Sherman, Texas 75090

Phone: 903-813-4778
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6060 North Central Expressway, Suite 602
Dallas, Texas 75206

Phone: 214-733-1775
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