Liz Weston: Free of debt - with regrets
Financial planners consider most student loans to be the kind of "good debt" that needn't be paid off in a hurry.
Federal student loans offer relatively low, fixed interest rates, deductible interest and numerous repayment options, including several years of deferral or forbearance plus the possibility of forgiveness.
While creditors can continue trying to collect out-of-statute debts, the McClanahans wouldn't have faced the potential lawsuits, wage garnishment or bank account liens that can come from ignoring in-statute debt.
Bankruptcy attorney Ed Boltz of Durham, North Carolina, has had clients who paid $5,000 to $10,000 to debt settlement companies without getting the relief they were promised.
Another mistake people frequently make is using their retirement funds or home equity in a vain attempt to pay off overwhelming debt.
Retirement fund raids typically trigger income taxes and penalties, while home equity loans put the borrower's home at risk of foreclosure.
If you're struggling to pay the minimums or it would take you five years or more to pay off most of your unsecured debt — primarily credit cards, medical bills and personal loans — consider debt relief instead.
A nonprofit credit counselor can advise you about debt management plans, but you also should talk with an experienced bankruptcy attorney.
Liz Weston is a certified financial planner and columnist at NerdWallet, a personal finance website, and author of "Your Credit Score."