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so let's say for example you have right now a $5,000 credit card okay that's the balance on this card you're paying 25% interest annually and that's about a $100 minimum payment every single month you're actually responsible for paying now all of a sudden by Magic you actually get an offer in the mail from a balance transfer credit card and you're like yo it must have been my luck it's not luck it's marketing your information has been sold thus the company knows about it and thus now they're sending you offers Direct offers to you now the offer says this we're going to give you 21 months to transfer your debt over to us and you get to pay it off in 21 months and we won't charge you any interest whatsoever for those first 21 months and you might say well this sounds like a great deal over here I'm paying for example a 100 bucks per month in interest but over here I'm going to be paying Z in interest for the first 21 months this saves me a bunch of money and the only catch is you have to pay a 3% fee for the entire balance transfer now that's not a big deal because right now you're paying $100 as a minimum payment and when you take 3% of 5,000 that's only about $150 or so so it's really not a big deal so why is this attractive what is the problem with it and what exactly is a balance transfer credit card I'm going to go into all the details in this video now do me a favor guys and ask you smash the like button I appreciate it a ton now the first thing is this guys okay a balance transfer credit card I'm not going to complicated it's basically just a credit card that is designed to actually get people that are in debt in some way to transfer their debt over to this credit card and potentially that company be the one that's actually going to get all that interest from you going further it's kind of like a long-term investment okay they're actually betting that you're not going to to pay it off in that introductory period and the TR going to keep the balance and you're going to continue to pay them and pay them and pay them and yes it could actually turn against them if you actually pay but for the most part they get 3% outright and if you don't pay them well you might become a customer for something else you might get another credit card with them or another product or a loan or a mortgage whatever it is okay they have a customer a prospect to get other things that is what a balance transfer is actually good for it now what is the problem here Tommy I still don't understand okay they're giving me an offer if I'm smart and I take advantage of it I walk away without paying any interest isn't that great well the answer is this okay you might think that you're actually going to walk away dilly dally free okay but what happens is usually this what's actually going on when you actually open up a Balan transfer credit card whether it's an offer whether you've been pre-approve approval whatever you just basically you basically just opened up another line of credit that is what's actually going on so let's say for example you have credit card a you owe $5,000 a year and now you actually get pre-approved for a balance for a credit card and then you basically apply and then say hey we're actually going to give you a balance of or a credit line of $7,000 and you say well that's awesome that's more than I had over here so now you say I want to transfer the balance from credit CR card a over to credit card B your new card the balance transer card and by the way it doesn't have to be a credit card it could also be for example Hospital loans it could be any debt overall even Collections and they could actually just basically pay that off by sending them a check and basically now you're in here and the debt is over here that's the whole idea okay so what happens is this okay you say I want to transfer balance from this card over to here they say okay just pay us a 3% fee you pay the 3% fee that's $150 they sent over a check to your credit card okay now that's fully paid off the balance on credit card a is basically zero the balance on your new balance crit card is basically um $5,000 or whatever the balance here basically was that's the idea now what actually happened here okay you went from having a credit line of $5,000 to having a credit line of basically $122,000 remember so if you got in value so far I'm going to ask for a favor subscribe to the channel because only like 20% of the people that watch or actually subscrib so go ahead and subscribe right now cuz I have a lot more content and having a credit line of basically $112,000 remember they actually gave you $7,000 and you have 21 months to pay that off okay without any interest and you might think this is awesome okay what I'm going to do is basically pay this off and never look back but what usually happens is this and I'm sad to say this okay but what usually happens is this okay you have credit card a now which is basically empty and you have credit card B all right and what happens is basically you say well this one is free you start using it again okay and before you know it this goes right back up to 5,000 or 3,000 or 4,000 and this one you're barely making any real payments or any Dent to it remember they gave you 5,000 the balance transfer credit card is still a credit card you can still use it to buy stuff and it still gave you $2,000 extra dollars and you actually need it so now you might use that for some things else okay and before you know it the 21 months have gone by and now you owe over $110,000 overall you owe credit card a you also go owe credit card B credit card B is saying yep we got them now we're actually collecting interest payments every single month from you and credit card a is saying well he paid it off but now he's back to pay now so I guess we win also so what is the right way to go about this and Tommy how have you ever done this the answer is I owed about wait for it $133,000 in credit card debt and I actually used balance transfer credit cards to actually help me clear all the debt now I was not one of the people that actually went ahead and basically clear credit card a transfer to credit card B and then build up a balance back in credit card a what I did was this I follow this three step system okay the first step is you want to set for yourself some really real istic goals based on how long they're actually going to give you interest free so overall let's say I actually owe $5,000 right that's how much I actually owe I'm going to divide this number by how many months you're actually going to give me so divided by 21 in this in this case by the way what credit card am I actually talking about I'm actually talking about the city Simplicity balance transfer credit card that offer 21 months to pay interest free 0% APR and even 12 12 months to actually buy things and not get charged any interest obviously they're doing this for a reason you transfer the balance over you get 21 months to pay it off but you also get 12 months to buy other crap and actually build up even a bigger balance don't be stupid don't fall for that okay so now I know that per month I need to pay about $240 to be debt free in21 months okay that's the idea and that's how I would actually do it now for me personally I would say well if if this is actually very doable I would stick to it if it's actually a little bit less than I can basically do I would actually lower it and basically even if I end with the balance okay at least I was actually realistic okay now for me personally I actually paid more towards it to be able to pay it off a lot faster I actually paid off $133,000 in credit card debt in 12 months okay because I actually fell for that trap where discover sent me a credit card and they were like Hey we're going to give you I think 18 months of purchase free interest and I went crazy okay I went crazy and what happened is I maxed out everything then it was like um I think it was 18 months right so I spent like 6 months doing some crazy stuff and then I had 12 months and I was like yo I need to pay all this in 12 months and I basically was able to cover everything in 12 months I think at a point I to transfer balance over to the balance transer card but I was actually able to do it which actually saved me a ton of money but it was only because I was smart so step number two is basically once you transfer the balance well close credit card a all right close it because you don't want to be at risk at rebuilding this actual um credit line and to actually get into double the debt you actually want to clear that and then lastly all right the balance CH credit card don't use it to get into more debt only use it to actually pay off the debt fast and be done with it and once you're done with all the debt my advice would be a 100% just close to to credit cards overall and don't get back into those problems okay ever since I became debt free and I don't have any credit cards I have no method no way of getting into debt anymore so it's not something I worry about but as long as you have that possibility that availability to watch you say I'm going to use this credit card for this or that for this emergency or that emergency you're always going to be going back into debt and going right back into where you landed I think the Bible says a dog is always going to return to his vomit and that's just disgusting okay so if debt is actually getting you into trouble over and over again and you're going back to it well that's just stupid and nonsense okay you actually want to avoid that so yes okay understand what they're trying to do they're trying to get you to bring your balance over to hopefully spend more money to be trapped with them and to pay them a bunch of interest but if you're smart what you're actually going to do is say I'm going to use you and I'm going to take advantage fully I'm going to close credit card a and once I'm done with you I'm also going to close you and I'm going to be done with it so set for yourself achievable goals so you're actually able to do this as fast as possible guys thanks for watching as always like subscribe hit the Bell sh notified there are obviously other balance of credit cards out there so if you know a few of them comment them down below if you want a full video on the offers out there let me know and I'll actually get to work up here is another video and this video is actually made possible by the supporters over at patreon here is a list of their names I appreciate it a ton if you actually want to join us on patreon support the channel the link is going to be down below thanks for watching as always like subscribe hit the Bell so you get notified peace
>>> AMERICANS ARE RACKING UP UNPRECEDENTED AMOUNTS OF CREDIT CARD DEBT. >> SOME ESTIMATES SHOW THAT WE COLLECTIVELY OWE $1.6 TRILLION. ACCORDING TO WALLET HUB, THE AVERAGE CHICAGO HOUSEHOLD OWES MORE THAN $13,000, AND THAT IS A STAGGERING FIGURE WHEN YOU CONSIDER THAT SOME OF THESE CREDIT CARD COMPANIES CHARGE AS MUCH AS 30% INTEREST ON OUTSTANDING PAYMENTS. EXIT JOINING US NOW TO SHARE SOME ADVICE FOR AMERICANS STRUGGLING WITH CREDIT CARD DEBT IS ASHLEY WALTON, CERTIFIED FINANCIAL PLANNER WITH THE GOLDSTONE FINANCIAL GROUP. ASHLEY, THANK YOU FOR JOINING US. FIRST THING IS FIRST, WHY IS CREDIT CARD DEBT RISING? >> THANKS FOR HAVING ME. I THINK THAT WE ALL HAVE FELT THE INFLATION INCREASING THE COST OF LIVING , AND UNFORTUNATELY, THAT MEANS THAT MORE AND MORE PEOPLE ARE STRUGGLING TO PAY FOR EVERYDAY EXPENSES, WHICH OFTENTIMES LEADS TO PEOPLE RELYING ON CREDIT CARDS JUST TO MAKE ENDS MEET.
AND THEN WE PAIR THAT WITH HIGHER INTEREST RATES AND THAT IS JUST MAKING IT EVEN HARDER FOR PEOPLE TO PAY OFF THEIR BALANCES. THE FEDERAL RESERVE HAS YET TO CUT INTEREST RATES THIS YEAR, WHICH MEANS MANY CREDIT CARD COMPANIES ARE STILL CHARGING SUCH HIGH RATES, SOMETIMES IT IS EVEN AS HIGH AS 25% APR. >> LET'S SAY WE DO HAVE A MOUNTAIN TO CLIMB BECAUSE OF ALL THOSE FACTORS, WHAT ARE YOUR TIPS ON HOW TO START CHIPPING AWAY AT THAT CREDIT CARD DEBT? >> SO, FIRST YOU HAVE TO PRIORITIZE DEBT REPAYMENT. IF YOU DON'T HAVE A BUDGET, YOU HAVE TO MAKE ONE TO HELP YOU STAY ORGANIZED. BECAUSE IF YOU WANT TO PAY OFF YOUR CREDIT CARD BALANCES, YOU WILL DO BETTER IF YOU HAVE AN ACTUAL WRITTEN BUDGET THAT PRIORITIZES THAT DEBT OR PAYMENT.
ONE THING YOU CAN DO IS TRY TO LOWER YOUR EVERYDAY EXPENSES IF YOU CAN, SO THEN WILL HAVE MORE MONEY TO PUT TOWARDS YOUR DEBT. I THINK WE ALL PROBABLY HAVE AT LEAST A SUBSCRIPTION OR TWO THAT WE CAN CANCEL, BUT ALSO, NOW THAT GROCERY BILLS ARE SO HIGH, IF YOU CAN FIND A WAY TO LOWER YOUR GROCERY BILL BY BUYING OFFBRAND ITEMS OR THINGS LIKE THAT, BUT THE MOST IMPORTANT PART OF THE BUDGET IS STICKING TO IT IN ORDER TO AVOID OVERSPENDING, BECAUSE OTHERWISE, YOU'RE JUST GOING TO KEEP INCREASING THOSE BALANCES.
>> SO, WHAT SHOULD WE DO NEXT? >> FIRST, PUT THE CARDS AWAY, AVOID ACCUMULATING MORE DEBT AS YOU PAY OFF WHAT YOU OWE. THAT IS SOMETHING THAT WE SEE SO OFTEN WEAR ONE BALANCE WILL GO DOWN, AND THEN ANOTHER BALANCE WILL GO RIGHT BACK UP. SO FIRST, IF YOU CAN, AS SOON AS A CARD GETS TO ZERO, SET UP AUTO PAYMENTS, SO IT WILL PAY OFF THE FULL BALANCE EACH MONTH, AND THAT WILL KEEP THAT ONE TAKEN CARE OF, RIGHT? SOME PEOPLE MIGHT THINK THEY ACTUALLY HAVE TO SEPARATE THEMSELVES FROM USING A CREDIT CARD ALTOGETHER, AND IF THAT IS THE CASE, YOU'RE GOING TO WANT TO STICK WITH PAYING FOR THINGS WITH CASH IF YOU CAN.
BUT WITH EVERYTHING ONLINE NOW, IT IS VERY HARD TO GET AWAY WITH BUYING EVERYTHING WITH CASH, SO ANOTHER IDEA IS TO TAKE OFF YOUR SAVED CARD INFORMATION. I KNOW IF I HAVE TO GET UP AND GET A PHYSICAL CREDIT CARD, I AM MUCH LESS LIKELY TO IMPULSE .
>>> IT IS FOR:00 P.M. THE NEW YORK STOCK EXCHANGE HAVE ANOTHER DAY OF TRADING, GOING UP ABOUT 550 POINTS. THE S&P 500 UP ABOUT 2 1/2% WITH THE NASDAQ IS UP ABOUT 3 1/4%. ONE LINGERING ECONOMIC CONCERN IS THE RISE IN CREDIT CARD DEBT. THE FEDERAL RESERVE BANK OF NEW YORK SAYS AMERICAN CREDIT CARD DEBT ROSE TO $887 BILLION IN THE SECOND QUARTER OF THIS YEAR. OUR NEXT GUEST RIGHTS IN THE WASHINGTON POST, CREDIT CAR BARS FACE MOUNTING BURDENS AND TO BREAK IT ALL DOWN SHE JOINS ME NOW. AN ECONOMIC CORRESPONDENT FOR THE WASHINGTON POST. WHAT IS DRIVING AMERICANS TO BORROW MORE ON CREDIT CARDS? >> IN A WORD, INFLATION. WE HAVE TO GO BACK A COUPLE YEARS TO GET THE FULL PICTURE. MANY FAMILIES HAD EXTRA MONEY EARLY ON IN THE PANDEMIC TO PAY DOWN BILLS.
WE SAW AMERICANS PAY DOWN BILLIONS IN CREDIT CARD DEBT. THEY HAD EXTRA SAVINGS, GOVERNMENT STIMULUS MONEY. INFLATION HAS GOTTEN WORSE AND THAT HAS REVERSED. WE ARE STARTING TO SEE PEOPLE CHARGING MORE ON THE CREDIT CARDS AND OWING MORE THAN USUAL. >> ONE CONCERN WE'VE HAD IS TALK OF RECESSION. HOW COULD MOUNTING DEBT MAKE IT WORSE IN TERMS OF AN ECONOMIC SLOWDOWN FOR EVERYBODY? >> WE ARE IN THIS MOMENT WHERE THE ECONOMY IS STRONG. UNEMPLOYMENT IS VERY LOW. MANY PEOPLE STILL HAVE JOBS. THE FEAR IS IF THERE IS A SLOWDOWN, IF THERE ARE MANY JOB LOSSES WE COULD START TO SEE MAJOR DEFAULTS ON CREDIT CARD DEBT. >> HOW MUCH DO YOU THINK NATIONAL RENT-A-CAR DEBT FACTORS INTO THE FED DECISION IN THE NEXT MONTH OR SO AS WE EXPECT THEY WILL CONTINUE RAISING INTEREST RATES? DOES IT PLAY A ROLE IN THAT? >> IT DOESN'T PLAY A ROLE, BUT THE DECISION TO RAISE INTEREST RATES WILL CONTINUE TO IMPACT PEOPLE WITH CREDIT CARD DEBT. THAT MEANS INTEREST RATES ARE RISING AND THEY OWN MORE AS A RESULT.
>> WELL, WE ARE VERY GRATEFUL. IT IS GOOD TO LOOK AHEAD AND TO KNOW WE CAN EXPECT THINGS TO GET WORSE. IF YOU CAN.
Hello and welcome to our YouTube channel. Today, we're going to be discussing the top
10 strategies for debt management. If you're struggling with debt, it can be
a stressful and overwhelming situation. But don't despair, there are steps you can
take to get your finances back on track. As always, make sure to Like and subscribe
to the channel to stay up-to-date on all of the latest news. Let's get started! Number 1. Make a budget: The first step in
managing your debt is to understand how much money you have coming in and going out each
month. Make a budget that includes all of your expenses,
including your debt payments. By tracking your spending and identifying
areas where you can cut back, you can free up more money to put towards your debts. Use budgeting tools and apps to help you stay
organized and on track with your spending. Number 2. Prioritize your debts: Not all debts are created
equal. Some debts, like mortgage or car loan payments,
are considered "good" debts because they can help you build credit and improve your financial
situation in the long run.
Other debts, like credit card balances and
payday loans, are considered "bad" debts because they usually have higher interest rates and
can be more difficult to pay off. Prioritize paying off your bad debts first,
as they are costing you the most in interest charges. Focus on paying off one debt at a time, starting
with the one with the highest interest rate. Number 3. Negotiate with creditors: If you're struggling
to make your debt payments, don't be afraid to reach out to your creditors and ask for
help. They may be willing to work with you to lower
your interest rates or negotiate a payment plan that works for you. It's important to be proactive and communicate
with your creditors, as ignoring your debts will only make the situation worse.
Be honest with your creditors about your financial
situation and explain why you are unable to make your payments. They may be willing to help you find a solution. Number 4. Use a debt consolidation loan: If you have
multiple debts with different interest rates, a debt consolidation loan can help you simplify
your payments and potentially save money on interest. With a debt consolidation loan, you'll take
out a new loan to pay off your existing debts, and then make one monthly payment to the lender. This can be a good option if you're able to
secure a lower interest rate on the consolidation loan. Just be sure to carefully compare your options
and choose a lender with competitive rates and fees. Number 5. Use a balance transfer credit card: If you
have high-interest credit card debt, consider transferring the balances to a credit card
with a lower interest rate. Many credit cards offer introductory 0% interest
rates for a limited time on balance transfers. Just be sure to read the fine print and understand
any fees associated with the balance transfer, as well as the length of the introductory
rate period.
If you're able to pay off your balances within
the promotional period, you can save a significant amount on interest charges. Number 6. Consider a debt management plan: A debt management
plan is a repayment plan that is set up through a credit counseling agency. The agency works with your creditors to lower
your interest rates and monthly payments, making it easier for you to pay off your debts. With a debt management plan, you'll make one
monthly payment to the credit counseling agency, and they will distribute the funds to your
creditors on your behalf. This can be a good option if you're unable
to negotiate a lower interest rate on your own. Just be sure to choose a reputable credit
counseling agency that is accredited by a reputable organization. Number 7. Seek professional help: If your debts are
overwhelming and you're not sure where to turn, consider seeking the help of a financial
advisor or credit counselor. They can provide personalized advice and assistance
in finding the best solution for your specific situation.
A financial advisor can help you create a
budget and a debt repayment plan, while a credit counselor can help you understand your
options and provide support as you work to pay off your debts. It's important to work with a professional
who is knowledgeable and experienced in debt management, and who has your best interests
at heart. Number 8. Cut expenses: To free up more money for debt
payments, try cutting unnecessary expenses from your budget. This could include things like dining out,
subscription services, or entertainment costs. Look for ways to save on your monthly bills,
such as by negotiating with your service providers or switching to a cheaper plan. Every little bit counts, so be sure to look
for opportunities to save wherever you can.
Number 9. Increase income: Another way to free up more
money for debt payments is to increase your income. This could be through finding a higher paying
job, starting a side hustle, or finding ways to monetize a hobby or skill. Even small increases in income can make a
big difference when it comes to paying off your debts. Consider taking on additional work or starting
a business on the side to boost your income and accelerate your debt repayment. Number 10. Consider bankruptcy as a last resort: If your
debts are truly overwhelming and you're unable to make any progress in paying them off, bankruptcy
may be an option.
However, it's important to understand the
long-term consequences of bankruptcy, including the impact on your credit score and your ability
to borrow in the future. Bankruptcy should be considered as a last
resort, after you have explored all other options for managing your debts. It's a serious decision that should not be
taken lightly, so be sure to consult with a financial advisor or attorney before proceeding. These are the top 10 strategies for debt management. By following these tips and working with a
financial professional, you can get a handle on your debts and take control of your financial
future. Remember, it's never too late to start making
positive changes to your finances. Thanks for watching, and be sure to like and
subscribe for more helpful financial tips.
– $100,000 of credit card debt. Can you even imagine
having that much debt? Maybe you do have that
much credit card debt. In this video, we're going to talk about how to solve that problem of large amounts of credit card debt. But first, if this is your first time here on my YouTube channel, please
go ahead and subscribe. On a weekly basis I
provide different content on how to deal with really
serious and big problems whether it's bankruptcy, whether it's debt collection lawsuits, or whether it's dealing with large amounts of credit card debt, which is what we're going
to talk about today. Now to put this into perspective, $100,000 of credit card debt. If you're paying the
average interest rate. And nationwide, this is
according to WalletHub, they say the average interest rate in the United States right
now is 19.02% interest. Which seems kind of high, but
that's what the average is across the board on new credit cards, 19%. If you have $100,000 of credit card debt, you're monthly minimum payment
is going to be $4,000 a month. So you can see how this
could really quickly get out of control.
Now you may be asking yourself, how does anyone get $100,000
of credit card debt? Let me tell you in my
law practice what I see, how this typically happens. The first one is business debt. Business credit cards are
a little easier to get, at least in high amounts. They may be lines of
credit, or lines of credit that have rolled over into a
credit card type situation. Where we see that they'll get multiple. You know, it's usually not just one card, but there'll be four or five cards with 15, $20,000 of credit on it. And those get racked up, the
business doesn't do well, the business fails. You know, worldwide pandemic happens. And all of a sudden you can't pay your monthly credit card payments. All of a sudden that
becomes a big problem. The second area I see is medical debt. A lot of people put their
medical expenses on credit cards.
Either because they have high deductibles, which most insurance policies nowadays do have very high deductibles. Or they don't have insurance at all so they put those medical
services on a credit card, and then they're unable to pay them. The third area that I see this is where people are consistently supplementing their monthly
income with credit cards. So if someone, their
salary is $4,000 a month. They're consistently
putting $500 to $1,000 on the credit card. And over time it starts to build up and with interest the whole
thing just starts to snowball. So it may sound like,
hey $100,000 in debt, that's really got to be the exception. It's more common than you think, particularly in my line of
business, I do bankruptcy law. I see people routinely
that have 50,000 plus and a number of those
people get over 100,000. Sometimes up to $150,000
of credit card debt. So the question is, what
do you do if you have large amounts of credit card debt, how do you solve that problem? Really you have three options. Your first option is
to simply pay it back. This is done through usually something like the Dave Ramsey snowball method.
Something that a lot of people don't know is I'm actually a certified
master financial coach through the Dave Ramsey Organization. Which I know is kind of weird because I'm also a bankruptcy attorney. But I believe in that type of method. If it's something where you have the means to be able to pay back
your debts over time, using Dave Ramsey's snowball method of starting with the lowest balance and start paying that off, and then taking the monthly
minimum that you paid on each card that you pay off and
applying it to the next one as you go over time. That's a great method
for getting rid of debt. It requires an incredible
amount of discipline and it requires a regular, monthly income that can actually pay that debt off. That's where I see a
lot of people struggle, is they simply don't
have the monthly income.
Particularly right now as we're dealing with this coronavirus,
COVID-19 thing going on. A lot of people's income has
reduced, their hours are down. And so that makes that type
of approach pretty difficult. The second one is to settle the debts. Now debt settlement is generally a decent approach to
deal with these things. A lot of the big problems I see is if you have a lot of cards. If you have 50,000 or
100,000 in credit card debt and it's spread out over
10, 15 credit cards, it's going to be pretty difficult. Because you have to get
all of them on board in order for the settlement
to make much sense. If you don't get them all on board and you settle half of them
and the other half sue you, you're not in a much better situation. So if you have a low
number of credit cards, you know, two to four, maybe five cards and you have the ability to make offers.
Usually settlement is only effective if you have a lump sum to deal with. So if you have some cash
and you can pay anywhere from 20 to 50% of the total
amount that they're seeking, they may be willing to settle with you. It's important to note that settlement, at least good settlements,
usually only happen once the account goes
completely delinquent, either it's charged off or
even sold to a junk debt buyer, that's where you're going to
get the better settlements.
If you're current on
your payments right now and you call up your credit
card company and say, "Hey I'd like to pay half." They're going to tell
you pounce and you can pay the full amount, or they may give you
some kind of you know, forbearance, something like
that for a month or two. But they're not going to
give you the good deal until it goes negative or
til it goes delinquent. The problem with that obviously is it's going to impact your credit. So let's talk about the
third option, bankruptcy.
The B word. You know, most people don't
want to file for bankruptcy, but it's a very powerful tool for getting rid of credit card debt. If you find yourself in this situation. In the typical Chapter 7 bankruptcy, pretty much all credit
card debt is discharged. It's eliminated. It goes away completely,
there's not payback, there's no tax consequences to it. It just goes away and is discharged. So if you're dealing with large
amounts of credit card debt a Chapter 7's not a bad option of just getting it out completely. It's a relatively quick process, it takes about four to five months. The alternative is a Chapter 13. Chapter 13 is typically
when people don't qualify for a Chapter 7 because
their income is too high. I can't go into the specifics of income here in this video because those
numbers change all the time and it varies from state to state. But I can tell you this, they base it upon your
household size and your income. And depending on where you're at there, a bankruptcy lawyer
will help you determine if you're able to move
forward with a Chapter 7.
If not, you're looking at a Chapter 13 or you'll be required to pay
back a portion of that debt over a 60-month period. At the end of the 60 months if there's any balances still remaining, that would be discharged
or eliminated completely at that point. So those are really your three options. You can pay it, you can settle it, or you can file bankruptcy on it. The best thing obviously
is to try to avoid getting into that kind of debt. But that's not what I do on this website is help you avoid it,
I help you get out of the problems that you're already in. So I appreciate you watching today. If you want to learn
more about how to deal with large debts or some
of those different options, debt settlement, bankruptcy, or even that Dave Ramsey snowball. I have more videos on this site. Make sure you subscribe
and check those out. I know they can help you out. Thanks for watching today..
so let's say for example you have right now a $5,000 credit card okay that's the balance on this card you're paying 25% interest annually and that's about a $100 minimum payment every single month you're actually responsible for paying now all of a sudden by Magic you actually get an offer in the mail from a balance transfer credit card and you're like yo it must have been my luck it's not luck it's marketing your information has been sold thus the company knows about it and thus now they're sending you offers Direct offers to you now the offer says this we're going to give you 21 months to transfer your debt over to us and you get to pay it off in 21 months and we won't charge you any interest whatsoever for those first 21 months and you might say well this sounds like a great deal over here I'm paying for example a 100 bucks per month in interest but over here I'm going to be paying Z in interest for the first 21 months this saves me a bunch of money and the only catch is you have to pay a 3% fee for the entire balance transfer now that's not a big deal because right now you're paying $100 as a minimum payment and when you take 3% of 5,000 that's only about $150 or so so it's really not a big deal so why is this attractive what is the problem with it and what exactly is a balance transfer credit card I'm going to go into all the details in this video now do me a favor guys and ask you smash the like button I appreciate it a ton now the first thing is this guys okay a balance transfer credit card I'm not going to complicated it's basically just a credit card that is designed to actually get people that are in debt in some way to transfer their debt over to this credit card and potentially that company be the one that's actually going to get all that interest from you going further it's kind of like a long-term investment okay they're actually betting that you're not going to to pay it off in that introductory period and the TR going to keep the balance and you're going to continue to pay them and pay them and pay them and yes it could actually turn against them if you actually pay but for the most part they get 3% outright and if you don't pay them well you might become a customer for something else you might get another credit card with them or another product or a loan or a mortgage whatever it is okay they have a customer a prospect to get other things that is what a balance transfer is actually good for it now what is the problem here Tommy I still don't understand okay they're giving me an offer if I'm smart and I take advantage of it I walk away without paying any interest isn't that great well the answer is this okay you might think that you're actually going to walk away dilly dally free okay but what happens is usually this what's actually going on when you actually open up a Balan transfer credit card whether it's an offer whether you've been pre-approve approval whatever you just basically you basically just opened up another line of credit that is what's actually going on so let's say for example you have credit card a you owe $5,000 a year and now you actually get pre-approved for a balance for a credit card and then you basically apply and then say hey we're actually going to give you a balance of or a credit line of $7,000 and you say well that's awesome that's more than I had over here so now you say I want to transfer the balance from credit CR card a over to credit card B your new card the balance transer card and by the way it doesn't have to be a credit card it could also be for example Hospital loans it could be any debt overall even Collections and they could actually just basically pay that off by sending them a check and basically now you're in here and the debt is over here that's the whole idea okay so what happens is this okay you say I want to transfer balance from this card over to here they say okay just pay us a 3% fee you pay the 3% fee that's $150 they sent over a check to your credit card okay now that's fully paid off the balance on credit card a is basically zero the balance on your new balance crit card is basically um $5,000 or whatever the balance here basically was that's the idea now what actually happened here okay you went from having a credit line of $5,000 to having a credit line of basically $122,000 remember so if you got in value so far I'm going to ask for a favor subscribe to the channel because only like 20% of the people that watch or actually subscrib so go ahead and subscribe right now cuz I have a lot more content and having a credit line of basically $112,000 remember they actually gave you $7,000 and you have 21 months to pay that off okay without any interest and you might think this is awesome okay what I'm going to do is basically pay this off and never look back but what usually happens is this and I'm sad to say this okay but what usually happens is this okay you have credit card a now which is basically empty and you have credit card B all right and what happens is basically you say well this one is free you start using it again okay and before you know it this goes right back up to 5,000 or 3,000 or 4,000 and this one you're barely making any real payments or any Dent to it remember they gave you 5,000 the balance transfer credit card is still a credit card you can still use it to buy stuff and it still gave you $2,000 extra dollars and you actually need it so now you might use that for some things else okay and before you know it the 21 months have gone by and now you owe over $110,000 overall you owe credit card a you also go owe credit card B credit card B is saying yep we got them now we're actually collecting interest payments every single month from you and credit card a is saying well he paid it off but now he's back to pay now so I guess we win also so what is the right way to go about this and Tommy how have you ever done this the answer is I owed about wait for it $133,000 in credit card debt and I actually used balance transfer credit cards to actually help me clear all the debt now I was not one of the people that actually went ahead and basically clear credit card a transfer to credit card B and then build up a balance back in credit card a what I did was this I follow this three step system okay the first step is you want to set for yourself some really real istic goals based on how long they're actually going to give you interest free so overall let's say I actually owe $5,000 right that's how much I actually owe I'm going to divide this number by how many months you're actually going to give me so divided by 21 in this in this case by the way what credit card am I actually talking about I'm actually talking about the city Simplicity balance transfer credit card that offer 21 months to pay interest free 0% APR and even 12 12 months to actually buy things and not get charged any interest obviously they're doing this for a reason you transfer the balance over you get 21 months to pay it off but you also get 12 months to buy other crap and actually build up even a bigger balance don't be stupid don't fall for that okay so now I know that per month I need to pay about $240 to be debt free in21 months okay that's the idea and that's how I would actually do it now for me personally I would say well if if this is actually very doable I would stick to it if it's actually a little bit less than I can basically do I would actually lower it and basically even if I end with the balance okay at least I was actually realistic okay now for me personally I actually paid more towards it to be able to pay it off a lot faster I actually paid off $133,000 in credit card debt in 12 months okay because I actually fell for that trap where discover sent me a credit card and they were like Hey we're going to give you I think 18 months of purchase free interest and I went crazy okay I went crazy and what happened is I maxed out everything then it was like um I think it was 18 months right so I spent like 6 months doing some crazy stuff and then I had 12 months and I was like yo I need to pay all this in 12 months and I basically was able to cover everything in 12 months I think at a point I to transfer balance over to the balance transer card but I was actually able to do it which actually saved me a ton of money but it was only because I was smart so step number two is basically once you transfer the balance well close credit card a all right close it because you don't want to be at risk at rebuilding this actual um credit line and to actually get into double the debt you actually want to clear that and then lastly all right the balance CH credit card don't use it to get into more debt only use it to actually pay off the debt fast and be done with it and once you're done with all the debt my advice would be a 100% just close to to credit cards overall and don't get back into those problems okay ever since I became debt free and I don't have any credit cards I have no method no way of getting into debt anymore so it's not something I worry about but as long as you have that possibility that availability to watch you say I'm going to use this credit card for this or that for this emergency or that emergency you're always going to be going back into debt and going right back into where you landed I think the Bible says a dog is always going to return to his vomit and that's just disgusting okay so if debt is actually getting you into trouble over and over again and you're going back to it well that's just stupid and nonsense okay you actually want to avoid that so yes okay understand what they're trying to do they're trying to get you to bring your balance over to hopefully spend more money to be trapped with them and to pay them a bunch of interest but if you're smart what you're actually going to do is say I'm going to use you and I'm going to take advantage fully I'm going to close credit card a and once I'm done with you I'm also going to close you and I'm going to be done with it so set for yourself achievable goals so you're actually able to do this as fast as possible guys thanks for watching as always like subscribe hit the Bell sh notified there are obviously other balance of credit cards out there so if you know a few of them comment them down below if you want a full video on the offers out there let me know and I'll actually get to work up here is another video and this video is actually made possible by the supporters over at patreon here is a list of their names I appreciate it a ton if you actually want to join us on patreon support the channel the link is going to be down below thanks for watching as always like subscribe hit the Bell so you get notified peace
