How do you figure out what debt to pay off first. Home prices are at historic highs and many homeowners have the opportunity to do a cash-out refinance from the equity in their homes. However, there are instances where the proceeds from the cash-out refinance will not be enough to pay all outstanding debts of the borrower. So, if that is the case, what debt should you always pay off first. What are the three biggest strategies for paying down debt. Should I pay the debt with the highest monthly payment first?