Statute of Limitations on Debt

State	Oral	Written	Promissory	Open-ended Accounts	State Statute: Open Accounts
AL	6	6	6	3	§6-2-37
AR	3	5	3	3	§16-56-105
AK	6	6	3	3	§09.10.053
AZ	3	6	6	3	§12-543
CA	2	4	4	4	§337
CO	6	6	6	6	§13-80-101
CT	3	6	6	3	§52-581
DE	3	3	3	4	§2-725
DC	3	3	3	3	§12-301
FL	4	5	5	4	§95.11
GA	4	6	6**	4	§9-3-25
HI	6	6	6	6	HRS 657-1(4)
IA	5	10	5	5	§614.5
ID	4	5	5	4	§5-222
IL	5	10	10	5	735 ILCS 5/13-205
IN	6	10	10	6	§34-11-2
KS	3	6	5	3	§84-3-118
KY	5	15	15	5	§413.120
LA	10	10	10	3	§3-118
ME	6	6	6	6	§14-205-752
MD	3	3	6	3	§5-101
MA	6	6	6	6	c.260, §2
MI	6	6	6	6	§600.5807
MN	6	6	6	6	§541.05
MO	5	10	10	5	§516.120
MS	3	3	3	3	§15-1-29
MT	5	8	8	5	27-2-202
NC	3	3	5	3	§1-52(1)
ND	6	6	6	6	28-01-16
NE	4	5	5	4	§25-206
NH	3	3	6	3	382-A:3-118
NJ	6	6	6	6	2A:14-1
NM	4	6	6	4	§37-1-4
NV	4	6	3	4	NRS 11.190
NY	6	6	6	6	§2-213
OH	6	15	15	6	§2305.07
OK	3	5	5	3	§12-95
OR	6	6	6	6	§12.080
PA	4	4	4	4	§5525
RI	15	15	10	10	§6A-2-725
SC	3	3	3	3	SEC 15-3-530
SD	3	6	6	6	§15-2-13
TN	6	6	6	6	28-3-109
TX	4	4	4	4	§16.004
UT	4	6	6	4	78B-2-307
VA	3	5	6	3	8.01-246
VT	6	6	5	3	§3-118
WA	3	6	6	3	RCW 4.16.080
WI	6	6	10	6	893.43
WV	5	10	6	5	§55-2-6
WY	8	10	10	8	§1-3-105

** Georgia Court of Appeals came out with a decision on January 24, 2008 in Hill v. American Express that in Georgia the statute of limitations on a credit card is six years after the amount becomes due and payable

The material provided in this table for informational purposes only and should not be construed as legal advice. Although the material is deemed to be accurate and reliable, we do not make any representations as to
its accuracy or completeness and as a result, there is no guarantee it is not without errors.

Here To Be An Asset To You,

Jesse Niesen
DebtGoToGuy.com

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Debt Relief & Your Credit — The Skinny On How Debt Relief Plans, Credit Counseling, Debt Settlement and Bankruptcy Affect Your Credit

Filed under Bankruptcy, Credit Card Debt, Credit Counseling, Credit Help, Debt Consolidation, Debt Payoff Plans, Debt Settlement by Jesse Niesen on October 6, 2010 at 2:15 am {no comments}

Your credit will be affected no matter what you do.

Let’s learn how…

First, let me ask you an interesting question:

What do you really need your credit score for, other than acquiring more high interest (bad) credit card debt?

How much is your credit score costing you each month, in real dollars?

(Dollars you could spend on food, shopping, vacation, retirement, your children, education, etc, instead of handing it over to your creditors in interest payments every month?)

Credit Importance Test

What’s most important to you?

1. To have the lowest monthly payment possible on your debts?
2. To get out of debt for the lowest amount possible?
3. To get out of debt as soon as possible?

In 2005 I conducted a “National Debt Relief Survey” while serving as COO of STARTOVERTODAY.COM, a nationwide financial solutions company I co-founded in 2002. I surveyed over 10,000 people who had asked us for help with their credit card debt online this question, “What is most important to you?”

Here are the results for the answers chosen:

Lowering your monthly payments 7.6%
Reducing the amount of debt you owe 12.7%
Getting out of debt ASAP 42.4%
Preserving perfect credit 4.2%
Restoring less-than-perfect credit 16.1%
Having only one monthly payment 4.2%
Stopping creditor calls 4.2%
Reducing or Eliminating Interest & Fees 3.4%
Other 5.1%

When I saw these results, all I could say was, “Wow!”

I was shocked, and so were the executives of several top debt management companies who I shared the results with, because we were all convinced up until then that most people just wanted the lowest monthly payment. As it turns out, most people just want to get out of debt ASAP!

Back to the question I asked you a minute ago, here it is again:

What’s most important to YOU?

1. To have the lowest monthly payment possible on your debts?
2. To get out of debt for the lowest amount possible?
3. To get out of debt as soon as possible?

Would you be willing to lower your credit “rating” in the short term in order to accomplish (Questions #1, #2, or #3 above) if it improved your credit “worthiness” long term?

* See Credit “Rating” vs. Credit “Worthiness” if you do not understand this question.

High Credit Scores

If keeping your credit score high (assuming it’s already high enough to matter) is more important to you than getting out of debt the fastest, cheapest or for the lowest payment, then the only options you have are either continuing to make your minimum payments or get out faster by paying even more per month and doing what’s called an “accelerated debt payoff plan“.

Still, we must ask ourselves, what do we want credit for?

…A quote I read in an article once said:

“worrying about your credit rating when you’re drowning in debt is like worrying about how your front yard looks when your house has just burned to the ground…”

“Less-Than-Perfect Credit”

If you have less than perfect credit, then you may not have much to lose at all, and a whole lot to gain. You’ll learn the specifics of how each option affects your credit and understand which option will eliminate your debt and credit problems, and be easiest to clean up after. Plus, you’ll learn how to repair and build your credit, no matter what you’ve been through.

Credit Myth Exposed

There’s a myth out there that you can lower your monthly payment, get out of debt for the lowest amount possible and/or get out of debt as soon as possible WITHOUT any negative effect on your credit.

Well, this is simply not true. The fastest ways to get out of debt all have some kind of negative affect, minimal or extreme.

The truth is, there is no option available for you to accomplish what you have in mind whether you want to lower your monthly payment, get out of debt for the lowest amount possible and/or get out of debt as soon as possible WITHOUT negatively affecting your credit in the short term.

So let’s take a look at the debt relief options available to lower payments, reduce balances and get out of debt ASAP, and how each negatively affects your credit…

Bankruptcy

Any bankruptcy is an extremely negative item on your credit report, often viewed as the worse mark you could ever have. Chapter 7 stays on your credit for 10 years. Chapter 13 stays on your credit report for 7 years AFTER it’s discharged, usually following a 5 year repayment plan, thus damaging your credit for a total of 12 years!

Mortgage guidelines will not allow you to get a mortgage loan or refinance for at least 24 months after discharging a chapter 7 bankruptcy filing, and up to 48 months after discharging a chapter 13 bankruptcy.

Still, if you cannot afford any other option, then you may need to consider bankruptcy.

Credit Counseling

“Credit Counseling” is also known as CCCS, Consumer Credit Counseling Services, Debt Consolidation and Debt Management Programs.

Credit Counseling no longer affects your credit “score”, BUT enrolling in this type of program DOES have a major negative impact to your credit “worthiness”. Lenders view this just as negatively, or worse, than bankruptcy. In fact, seeing enrollment in Consumer Credit Counseling on a credit report is often called a “walking bankruptcy”. This negative affect lasts about 30 days longer than the debt management program lasts, which is usually 5-7 years. If you cannot afford an accelerated payoff plan and do not qualify for debt settlement, then you need to consider credit counseling.

Just make sure you understand what you’re getting involved in: Credit Counseling Lies Exposed – The Truth Non-Profit Credit Counselors Don’t Want You to Know

Debt Settlement

Debt settlement has minimal to serious damage to your credit rating due to late payments and charge offs, depending mostly on how good your credit rating is in the first place. Debt settlement may significantly affect someone with perfect credit but may not have much negative affect at all on someone who’s already fallen behind. In fact, debt settlement may significantly improve credit rating and worthiness for such individuals rapidly.

NOTE: Debt settlement is not reported on credit report as a bankruptcy and credit counseling are.

If you cannot afford an accelerated debt relief plan, then you may want to consider debt settlement.

Debt Relief Options

Let’s take a closer look into your options to get out of debt:

Here To Be An Asset To You,

Jesse Niesen
DebtGoToGuy.com

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Why Bank Of America Fired Me (Former B of A Employee Tells All)

Filed under Credit Card Debt, Inspiration by Jesse Niesen on February 3, 2010 at 11:15 am {3 comments}

Have You Been A Long-Time Loyal Customer With Bank Of America? (Or Citibank, Discover, Chase, Capital One Or Another Big Credit Card Company?)

This Shocking True Story Reveals What’s Really Going On Behind The Scenes…

** 229,473 views. 2,145 Votes. Average Rating = Five Stars (Awesome!)

This story reminds me of a common complaint I hear from my clients…

Many of us have been long-time loyal customers of big banks like Bank of America, Citbiank, Discover, Chase or the like. After paying on time for many years, many of my clients say they expected their creditor to help them out when they found themselves in a tough situation. To their surprise, most of these big creditors not only REFUSE to help, but many times take advantage of the situation by racking up interest rates, adding on fees, increasing payments and lowering limits. This often triggers “universal default”, starting a chain reaction for others creditors to follow suit and do the same. This negative snowball often forces consumers to consider bankruptcy.

Has something like this happened to you?
How do you feel about how these big creditors treat their customers?
Have you been a loyal customer to your creditors?

Here To Be An Asset To You,

Jesse Niesen
DebtGoToGuy.com

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DEBTORS REVOLT BEGINS NOW!

Filed under Credit Card Debt, Inspiration by Jesse Niesen on January 31, 2010 at 1:19 am {no comments}

499,602 Views + 5,929 Five-Star Ratings Say This YouTube Video Is Awesome!

This Is The Most-Viewed “Credit Card Debt” Video I Have EVER Seen.

What Do You Think?

From Rockerchic4God on YouTube:

Message to Bank of America: I’ve decided to it’s time to take a stand against the banksters’ usury and greed! If our founding fathers were willing to sacrifice their LIVES for our FREEDOM, then I can certainly sacrifice my credit score and be willing to be sued. I’m staging a DEBTOR’S REVOLT!

How Do You Feel About a Debtors Revolt?

If you want to speak out or share your story, please feel free to COMMENT and SHARE like CRAZY!!!
Leave a comment below (click “comments”), “share the wealth” or at least send me a private message by email.

Here To Be An Asset To You,

Jesse Niesen
DebtGoToGuy.com

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“Til Debt Do Us Part” — 10 Tips to Get Out of Debt

Filed under Credit Card Debt, Inspiration by Jesse Niesen on January 23, 2010 at 7:50 pm {no comments}

Recently I’ve been watching the TV show “Til Debt Do Us Part” on CNBC…

I love CNBC and have tuned in for financial news since I traded stocks for a living over a decade ago. I watch most of their original shows and being in the business of getting you out of debt fast, I had to tune in and watch this one.

This week I went online and found these 10 Tips to Get Out of Debt…

#1) Cut Your Credit Cards and Set A Budget

Every family that finds themselves in debt should cut up all their credit cards and live on a cash budget, keeping a log of each and every expenditure made. Use the following formula to set a budget. Keep in mind that the “life” category includes is everything from groceries, to gadgets to entertainment. Housing: 35%, Debt: 15%, Life: 25%, Transportation, 15%, Savings 10%.

Free Budgeting eBook: Money for Life by Steve Smith

Budgeting Guide: Sexy Budgeting for Fun & Profit by Jesse Niesen
* Use COUPON CODE: “sexybudgetsarecool” to receive $30 OFF

Budgeting Systems:

Mvelopes (Award winning online software – Free trial)

YNAB (Simple, beautiful software that’s a joy to use – Free trial)

Mint (Best free budgeting system)

#2) Reduce Your Interest Rates

Reducing your interest cost is one way to fast track your way out of debt. Some people have interest rates as high as 30%, when they pay their monthly minimum, all they’re doing is paying off interest rather than chipping away at the principal.

1) If you have good credit, then quickly eliminate interest, reduce monthly minimum payments and pay down your debt FASTER by doing a Balance Transfer to 0% from every account your currently paying interest on.

2) If your credit limits you from transferring all balances to 0%, and you’re stuck paying interest, then it may* be worth asking your creditors to lower your interest. By calling to negotiate with creditors, high interest rates may be brought down. If you call and a representative says they can’t help you, ask to be connected to a supervisor until you get to someone with the authority to reduce your rates.

* WARNING: Be careful if you have nowhere to transfer your balances because in the US during the economic crisis, such requests may cause your credit card company to conduct an “account review” where many times people have seen their credit limits reduced to their current balance (or damn close), causing them to suddenly become “maxed out”; negatively impacting their “utilization” and credit score.

#3) Bring In Extra Money

Do anything you can to bring in extra money to throw at your debt, even if you work a full time job. Consider overtime at work, dog walking, baby sitting, tutoring, or using any skill that’s unique to you to bring home the bacon…some creative ideas we’ve seen on the show: web designing, party planning, teaching music lessons and much, much more!

Get Out of Credit Card Debt FASTER: 8.5 Tips to Find Extra Cash

#4) Get Your Priorities Straight

When deciding how to tackle debt and putting a plan in place to save for the future, you have to consider all of your options. Ask yourself the tough questions and prioritize…if going to grad school is important, then maybe you can be a student but take on a part-time job. If having a child is important, do you need to take a full maternity leave? Should you consider buying a home – maybe renting is a smarter option? Make a list of things you want to do and discuss them thoroughly with your partner to help make the best decisions for you and your relationship.

Sexy Budgeting for Fun & Profit takes you through the process in a fun and effective way Use this tool as a couple or single and independent. Use COUPON CODE: “sexybudgetsarecool” to receive $30 OFF.

#5) Chip Away At The Debt

To reduce debt, make a list of every single debt that you have and rank them in order of the highest interest rate, not the highest balance. Pay off the highest interest rate card first. Every time you have extra money, throw it at the debt you’ve targeted until it’s gone and then stop using that card! Reward yourself by making a checklist and crossing out the debt, you’ll feel better as you start to see it disappear. When your debt is paid off, take the money you were allocating for debt repayment and put it towards savings.

Extra Tip = Learn more about all types of “Accelerated Debt Pay Off Plans“

#6) Keep Things In Perspective

Getting out of debt isn’t easy, but you have to remember that you cannot let debt consume you and hurt your relationship. You and your partner need to work through the debt together, making sacrifices but focusing on what’s important as well – your family and your relationship. Get a babysitter and make time to do something special with your spouse so you can remember why you fell in love, set time aside to do group activities as a family to involve the kids as well. Don’t let your debt get the best of you.

Secret Tip = Gain control of the power of your subconscious mind to rapidly improve every area of your life.

#7) Getting Out of Debt Doesn’t Mean You Can’t Ever Spend Again

When working your way out of debt you can still spend on things that are important to you, you just need to plan and save for them. So for example, if you’re planning to get married, don’t rush out and cancel your wedding – re-think your wedding plans and see if there are cheaper alternative ways to spend on what you want. If you really love to travel, don’t cancel your trip for the year, figure out a way to do it on a tighter budget and save a little each month for it so you don’t have to put it on credit cards.

#8) Stop Eating Out

Eating out costs way more than buying food and cooking at home, not to mention that the latter option is much healthier as well. Make cooking dinner a family activity, something that can be done together to make the experience more enjoyable — and when you’re done cooking, sit down and have dinner together, discuss the day’s events and catch up. Having dinner parties at home is also a way to cut down on entertainment with friends. If you’re planning a romantic dinner consider taking the kids to their grandparents’ and having dinner at home rather than in a restaurant. If you’re going to get together with friends, consider the same thing. Remember, it’s not about the food, it’s about the company.

Personal Note = I DISLIKE this. I LOVE delicious food, and I LIKE eating out! So if my finances are upside down, then this really motivates me… Use eating out as a reward for reaching financial goals. It’s amazing what eating a tasty burger will do for you when you buy it with money you save after you pay off a debt, lower interest rates to 0, improve your position or make a significant step toward your goals. In the meantime, it will keep you hungry, which is exactly where you need to be to hustle yourself out of a mess quickly!

#9) Get Organized

When it comes to working your way out of debt it’s all about organization — believe it or not getting your documents in order will help you pay down your debt because it puts you in control. Organize your paperwork so you know where every important document is and so that all documents are easily accessible. Use a collapsible file folder, label the tabs clearly and most importantly, do this with your spouse so you both understand the system.

Extra Tip = Gather all of your most recent statements for all unsecured debt accounts and take a good, hard look* at where you’re at right now; your “point A”.

* In fact, I dare you to round up all of your most recent debt account statements, look up you minimum payments and then add up all of the “finance charges” you are paying every month. Look at how much money you might as well be throwing down the toilet… wasting it on interest. Remember, the “Big Idea” is to “STOP paying interest and START earning interest ASAP”? Just think of what you could have bought THIS month with that money? How muchdoes it add up to in a year? Would it change your life to actually implement the Big Idea?

#10) Be Willing To Part With Toys

Sometimes to get out of debt you’ll have to sell something that’s really important to you or that you love. The reality is dealing with the heartbreak of losing material things will be far less than dealing with the damage that these things can do to your finances. If you have to sell a car, house, piece of jewelry, artwork or anything else, take a deep breath and realize that what you’re doing will help your future and your finances — and just let it go.

About “Til Debt Do us Part”…

With ninety percent of marriages breaking up because of money problems, it’s no surprise that many couples are in desperate need of help tackling their financial issues. In Til Debt Do Us Part, renowned financial author and columnist, Gail Vaz-Oxlade takes a tough-love approach to getting couples in financial crisis to face reality. With the sensitivity of a therapist and the toughness of a CFO, Gail asks hard questions and pushes couples to face each other and reality. Some couples are on the verge of bankruptcy – others are just getting by, but headed for disaster – either way, they all learn how to work their way out of debt and get the skills they need to plan for their financial future.

Watch these 10 Tips as a slide show and learn about programming times at tildebtdouspart.cnbc.com/

If you’re struggling to make minimum payments and an “accelerated” plan is not an option for you, don’t worry, there are solutions to your problems. I’ve been there. I can help you too.

If you’re walking through the valley of the shadow of debt, let me help you “see the light at the end of the tunnel”.

If you haven’t done so already, SUBSCRIBE TODAY by entering your name and email in the upper right corner of this page… because, when you do, I’ll give you instant access to my complete “Debt Free ASAP” Videos and Workbook.

If you need immediate help with serious amounts of unsecured debt, then you’ll finally find relief through these trusted and proven solutions:

Credit Counseling (Free Counseling & Quotes)

Bankruptcy (Complimentary Case Evaluation *with Jesse)

Fair Debt Collection Representation (Complimentary Evaluation *with Jesse)
** Collectors calling? Feel like your rights are being violated? Discover how FDCPA Representation from creditor-butt-kickin attorneys can help you get into a stronger and more profitable position quickly.

Debt Settlement (OVER $40k)(Complimentary Consultation & Quotes *with Jesse)
** Must have $40,000+ in Credit Card or Unsecured Debt to apply to this exclusive “Sword & Shield” Forensic Mitigation and Debt Restructuring Program. Top debt settlement results provided by A+ BBB Rated, Accredited, FTC Compliant Law Firm in business since 1999 with a national network of attorney’s legally settling debt at a 38-40% average with zero complaints to the Better Business Bureau. Attorneys cannot guarantee outcomes and results may vary, but these pros are the best.

Debt Settlement (UNDER $40k) (Free Consultation from Affiliate Law Firm)
** Must have $10k+ in Credit Card or Unsecured Debt – “A” Rating & Accredited with BBB, in business since 2003 with transparency and accountability through the largest online debt relief community. NOTE: This consultation is NOT with Jesse.

Here To Be An Asset To You,

Jesse Niesen
DebtGoToGuy.com

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What You Must Know: New Credit Card Rules (In Effect 2/22/2010)

Filed under Credit Card Debt by Jesse Niesen on January 22, 2010 at 8:53 am {no comments}

Original post from the Federal Reserve website:

The Federal Reserve’s new rules for credit card companies mean new credit card debt protections for you. Here are some key changes you should expect from your credit card company beginning on February 22, 2010.

What your credit card company has to tell you

* When they plan to increase your rate or other fees. Your credit card company must send you a notice 45 days before they can:

o increase your interest rate;
o change certain fees (such as annual fees, cash advance fees, and late fees) that apply to your account; or
o make other significant changes to the terms of your card.

If your credit card company is going to make changes to the terms of your card, it must give you the option to cancel the card before certain fee increases take effect. If you take that option, however, your credit card company may close your account and increase your monthly payment.

For example, they can require you to pay the balance off in five years, or they can double the percentage of your balance used to calculate your minimum payment (which will result in faster repayment than under the terms of your account).
Your credit card company does not have to send you a 45-day advance notice if:

o you have a variable rate tied to an index; if the index goes up, the company does not have to provide notice before your rate goes up;
o your introductory rate expires and reverts to the previously disclosed “go-to” rate;
o your rate increases because you are in a workout agreement and you haven’t made your payments as agreed.

* How long it will take to pay off your balance. Your monthly credit card bill will include information on how long it will take you to pay off your balance if you only make minimum payments. It will also tell you how much you would need to pay each month in order to pay off your balance in three years. For example, suppose you owe $1,784.53 and your interest rate is 21.99%–your bill might look like this:

New balance	$1,784.53
Minimum payment due	$53.00
Payment due date	4/20/12

Late Payment Warning: If we do not receive your minimum payment by the date listed above, you may have to pay a $35 late fee and your APRs may be increased up to the Penalty APR of 28.99%.

Minimum Payment Warning: If you make only the minimum payment each period, you will pay more in interest and it will take you longer to pay off your balance. For example:

If you make no additional charges using this card and each month you pay. . .	You will pay off the balance shown on this statement in about. . .	And you will end up paying an estimated total of. . .
Only the minimum payment	10 years	$3,284
$62	3 years	$2,232 (Savings = $1,052)

New rules regarding rates, fees, and limits

* No interest rate increases for the first year. Your credit card company cannot increase your rate for the first 12 months after you open an account. There are some exceptions:

o If your card has a variable interest rate tied to an index; your rate can go up whenever the index goes up.
o If there is an introductory rate, it must be in place for at least 6 months; after that your rate can revert to the “go-to” rate the company disclosed when you got the card.
o If you are more than 60 days late in paying your bill, your rate can go up.
o If you are in a workout agreement and you don’t make your payments as agreed, your rate can go up.

* Increased rates apply only to new charges. If your credit card company does raise your interest rate after the first year, the new rate will apply only to new charges you make. If you have a balance, your old interest rate will apply to that balance.

* Restrictions on over-the-limit transactions. You must tell your credit card company that you want it to allow transactions that will take you over your credit limit. Otherwise, if a transaction would take you over your limit, it may be turned down. If you do not opt-in to over-the-limit transactions and your credit card company allows one to go through, it cannot charge you an over-the-limit fee.

o If you opt-in to allowing transactions that take you over your credit limit, your credit card company can impose only one fee per billing cycle. You can revoke your opt-in at any time.

* Caps on high-fee credit cards. If your credit card company requires you to pay fees (such as an annual fee or application fee), those fees cannot total more than 25% of the initial credit limit. For example, if your initial credit limit is $500, the fees for the first year cannot be more than $125. This limit does not apply to penalty fees, such as penalties for late payments.

* Protections for underage consumers. If you are under 21, you will need to show that you are able to make payments, or you will need a cosigner, in order to open a credit card account.

o If you are under age 21 and have a card with a cosigner and want an increase in the credit limit, your cosigner must agree in writing to the increase.

Changes to credit card billing and payments

* Standard payment dates and times. Your credit card company must mail or deliver your credit card bill at least 21 days before your payment is due. In addition:

o Your due date should be the same date each month (for example, your payment is always due on the 15th or always due on the last day of the month).
o The payment cut-off time cannot be earlier than 5 p.m. on the due date.
o If your payment due date is on a weekend or holiday (when the company does not process payments), you will have until the following business day to pay. (For example, if the due date is Sunday the 15th, your payment will be on time if it is received by Monday the 16th before 5 p.m.).

* Payments directed to highest interest balances first. If you make more than the minimum payment on your credit card bill, your credit card company must apply the excess amount to the balance with the highest interest rate. There is an exception:

o If you made a purchase under a deferred interest plan (for example, “no interest if paid in full by March, 2012″), the credit card company may let you choose to apply extra amounts to the deferred interest balance before other balances. Otherwise, for two billing cycles prior to the end of the deferred interest period, the credit card company must apply your entire payment to the deferred interest rate balance first.

* No two-cycle (double-cycle) billing. Credit card companies can only impose interest charges on balances in the current billing cycle.

What else do you need to know?

For more details on the upcoming changes affecting your personal credit card debt, see “Credit CARD Reform Act of 2009? – What’s It Mean To You?

Here To Be An Asset To You,

Jesse Niesen
DebtGoToGuy.com

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Why Making Minimum Payments On Credit Card Debt Is Insane

Filed under Credit Card Debt, Inspiration by Jesse Niesen on December 21, 2009 at 7:13 am {no comments}

If you can’t write a check, you don’t have the resources like a 401k or equity in a home to pay off your debt, what can you do? Most people out there are just making minimum monthly payments, exactly what the banks want them to do.

The average client I deal with these days has around $40,000 in credit card debt. This is a lot of debt, on top of which they’re paying 20% to 30% interest. This large payment is really hurting their debt-to-income ratio.

Most of these folks are over half-way utilized. Many people are already maxed out, hurting their credit again on the third leg, (debt to credit limit ratio) and they’re struggling to achieve the holy grail of credit by making their minimum payments on time. Unfortunately, that’s a trap! There are a lot of false beliefs that keep people in this cycle for a long time. You’re basically trapped if you don’t get off of that treadmill. You will be on it forever, making those minimum payments.

What most don’t realize is even if they have perfect payment histories and a “great” credit score, if they’re over utilizing their available credit or have a high debt to income ratio, they won’t be able to get affordable financing for the things they really want (cars, homes, etc). Those minimum payments aren’t getting them any closer to these goals.

Minimum payments on $40,000 of debt with 20% interest are going to take you 60 to 70 years to pay off. That’s a long time, too close to forever. Even if you owed $20,000 with an 18% interest rate, you’re still looking at 30 years or more to get out of debt. Making minimum payments is only good for you in the very extreme short term to maintain cash flow.

The appeal to buying on credit is overwhelming. You can have a lot of leverage because you can buy a whole bunch of stuff with a small monthly payment. This allure is what has trapped most people in America and is causing the current debt epidemic.

Really, there’s an epidemic out there! There’s over $2.3 trillion of consumer debt. The credit card companies are raking it in with little to no regulation on how they conduct their business (ie: interest rate hikes, penalties, fees, etc). This is not a small problem, and this is the trap you’re falling into when making minimum payments. There’s got to be a better way; unless you just want to be a slave to debt for the rest of your life.

Was this valuable to you? Feedback? Question(s)?

Please share your thoughts and ideas below. I respond to any questions posted as a comment in detail by email.

Thank you for the opportunity to serve you!

Here To Be An Asset To You,

Jesse Niesen
DebtGoToGuy.com

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How to Avoid Debtors Prison & Free Yourself from Debt Slavery TODAY!

Filed under Credit Card Debt, Inspiration by Jesse Niesen on December 3, 2009 at 7:03 am {no comments}

Let’s not fool ourselves. If you are in debt and paying interest, you’re already a slave to debt.

The real question is- What’s YOUR best choice to get out of debt?

Here’s a quick game plan to help you make your best choice to be debt free ASAP… (more…)

Get Out of Credit Card Debt FASTER: 8.5 Tips to Find Extra Cash!

Filed under Credit Card Debt, Money Management by Jesse Niesen on December 2, 2009 at 7:23 am {one comment}

Do you have any kind of lump sum to put towards paying off your debt?

If you’re even a little bit concerned about your cash flow right now because it’s limiting some of your debt relief options, then you may be curious how many of my debt free clients discovered a variety of creative ways to increase their cash flow to get out of debt faster, such as: (more…)

Expediting Credit Card Protection – Letter from Senator Feinstein

Filed under Credit Card Debt by Jesse Niesen on November 30, 2009 at 12:51 pm {no comments}

The following is an email I received today from United States Senator Dianne Feinstein. I thought you might like to see what she and others are doing to protect you from the greedy creditors who have been jacking up your interest rates, fees and payments ahead of the new laws going into full effect on February 22, 2010. I invite you to get involved to help speed up the implementation of these protections as well. See the bottom of the message to join the effort…

Dear Mr. Niesen:

Thank you for contacting me to express your support for legislation to expedite the enforcement date of recently enacted credit card protection legislation. I appreciate the time you took to write and welcome the opportunity to respond. (more…)

“Credit CARD Reform Act of 2009″ – What’s It Mean To You?

Filed under Credit Card Debt by Jesse Niesen on November 4, 2009 at 1:20 pm {one comment}

This past spring Congress passed the “Credit CARD Reform Act of 2009″ to put an end to the dirty tricks trapping so many of us consumers in high-cost credit card debt.

A few Credit Card Protections went into effect in August 2009 but we are still waiting for most protections to start on February 22, 2010.

In the meantime, credit card companies and banks are raising rates and changing the terms of credit card contracts for millions of consumers.

Credit card interest rates rose an average of 20% in the past 2 quarters as credit card companies and banks rush to jack up rates before the new rules take effect next year.

Has this happened to you?

How has this lowering of your credit limits and these increases to your interest rates (and monthly payments) affected your life so far?

How might it affect your Holidays this year?”

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How & Why to Get Out Of Debt

Filed under Credit Card Debt, Inspiration, Money Management by Jesse Niesen on January 2, 2009 at 11:37 pm {no comments}

The first option you have is to whip out a check and pay it off, but if you’re reading this now that’s probably not an option you can pursue. There are possibilities you may not have thought of. You may be able to borrow against a 401k. You may be able to pull money out of your home through an equity line of credit or by refinancing and pulling cash out. You may have assets you can sell to come up with the lump sum amount to pay the debt off.

Overall, here’s the thing you want, to find a way to stop paying interest and start earning interest. Why is this debt such a bad thing? Debt is a very bad thing if you have to pay the interest.

Debt can be a great thing if somebody else pays the interest for you and you’re financing an asset that’s putting money into your pocket. That’s good debt but bad debt is when you’re paying interest on it, especially on a depreciating asset. Buying a car is a good example of a bad thing to do with money overall. You’re buying something that goes way down in value quickly while you’re paying interest on it. You’re paying for it again and again.

They asked Einstein:

“What’s the most powerful force in the universe?”

Einstein said, “Compound interest.”

Now, when you’re in debt like this, you’re not feeling the full force of compound interest if you’re making some payments. That’s the problem! You’ve got the most powerful force in the universe working against you 24/7. So one way or another when looking at these options to get out of debt or to deal with your debt, you want to find a way to stop paying this interest and start earning interest.

Why?

The basic formula for wealth, no matter who you ask, all boils down to this (if they’re telling the truth); simply spend less than you earn and invest the rest for compounding interest so your money grows. If you do this then eventually you’re going to become wealthy!

Your money will be working for you and you will no longer have to work for it. I imagine the goal for everybody is to one day retire, maybe one day sooner than later. If we ever want to do that we’ve got to get out of this bad debt. If you’re paying interest, to me that sounds like a financial hardship; if you have to work for money so you can pay interest.

I have a client in Oklahoma. A good old boy, a really nice man, in his elderly years and for seven years straight he has been on social security. He has been taking cash advances from his credit cards so that he can make his minimum payments.

Think about that one… He’s taking cash advances from his credit cards, where he has to pay 30% interest to make his minimum payments.

Those minimum payments are 80% interest or more. It’s just a ridiculous cycle! I don’t know if you have ever felt like this; being in debt and making these payments is somewhat like running on a treadmill with a backpack full of bricks. Somebody keeps dropping more bricks into the backpack and turning up the speed and the incline on the treadmill.

Unfortunately, unless you find a way to get out of the trap, that’s your destiny.

So let’s take a look at these options again…

Number one is paying off your debt. Whether through a refinance, a 401k or by pulling money out from under your mattress, if you can write a check somehow you can pay your balances off and stop paying interest.

Always think about the math. For instance, if you’re earning 10% interest from a 401k you have to pay taxes on the capital gain that you get, and it’s also not guaranteed, it’s uncertain. It goes up and down. Let’s say you’re earning 10% or even 20% on some kind of aggressive 401k, you still have to pay taxes on it. Maybe it’s a good rate of return, but think of the credit card debt that you have. Your interest rates are probably between 10% and 34%. The average in America is 18.9% (probably higher these days). Just look at your recent credit card statements and look at the minimum payment, then the finance charges for the month. You shouldn’t be surprised if 70% to 90% of your minimum payment is going towards interest (out of your pocket and into the pocket of the creditor), but you should be very disturbed about it. If your interest rates were 20%, you would be doing better than my average client.

Think about the 20% interest you’re paying on credit card debt. If you were to pay it off by taking money out of your 401k, where it’s earning 10%, to pay off an equal amount of debt you’re paying 20% on, that means a 20% after tax guaranteed rate of return. Paying taxes and still getting 20% on your money, and it’s guaranteed! I don’t know of any other investment out there available to the common public paying this kind of return.

Remember the Big Idea! (See Blog: “The Big Idea- How to Solve Your Financial Problems” if you haven’t!)

We’re going to look at a couple of ways to get some leverage and pay off the debt you have for even less money, an even better return on investment! You want to find a way to stop paying interest and start earning it, allowing yourself a chance at retiring in this lifetime!

10 BIGGEST REASONS TO BE DEBT FREE WITH BETTER CREDIT & CASH FLOW

The resolution I’m going to ask you to make today has the power to change your life in many profound and specific ways.

* People will respect you more.

* You’ll have more power to control your life, your career, and your future.

* You’ll be richer, happier, and more confident.

* You’ll have a much easier time getting people to do what you want them to do … on your timetable and on your terms.

I’m talking about becoming debt free with strong cash flow and credit, even to build wealth and become a cup overflowing.

Whether you’re ___ … or ___… or ___ … you’ll have much more success if you’re debt free with strong cash flow and credit.

YOU HAVE YOUR OWN REASONS

I’m sure you have your own reasons to get out and stay out of debt, manage your spending, save money, and have good credit right?

How do I know?

Because you are here right now.

So WHY do you want to become debt free with better credit & cash flow?

Take a minute right now to think about WHY you want to get out and stay out of the “bad debt” you’re in.

I know you “need to do something” about your debt.

I’m right here with you.

My success in life is directly proportional to how much I help others solve their financial problems.

Only if these words are valuable and useful to you will you recommend this to your friends and family. It might be the biggest gift you ever give them.

PLUS, SOME OTHER THINGS WILL HAPPEN.

Financially healthy people are automatically held in higher regard than those who struggle with debt and bad credit. You’re seen as someone who’s intelligent, successful, and dependable. Your thoughts and ideas carry more clout. People respect your opinions more and give more credence to what you say. They trust you more, because they can “feel” the sincerity and confidence that’s associated with being debt free with good credit and positive cash flow.

As Adam Smith said, “What can be added to the happiness of a man who is in health, out of debt, and has a clear conscience?”

I think you’re getting the idea here. Your financial health can be the difference between getting people to champion your ideas – and having your ideas set aside (or, worse, dismissed altogether).

Was this valuable to you? Feedback? Question(s)?

Please share your thoughts and ideas below. I respond to any questions posted as a comment in detail by email.

Thank you for the opportunity to serve you!

Here To Be An Asset To You,

Jesse Niesen
DebtGoToGuy.com

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Motivated by Oprah’s Debt Diet?

Filed under Credit Card Debt by Jesse Niesen on December 25, 2006 at 7:21 am {no comments}

The Four Steps of the Debt Diet, WITH some Special “Secret Sauce” added… Enjoy!

NOTE: This is the original article I wrote and submitted on April 25th, 2006, and has since been ripped off all over the internet…

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