I filed in 2011. Best decision I made. Kept the car debt since it was 6 months from being payed off (which I actually gave to family member 2 years prior whom was still paying). So they were safe. No more late night calls, no more worry. I had a few new friend/aquatints that would ultimately be the difference in my success later on, and I was glad to be free and they were also no longer being called (even though I barley met them, they were still somehow being contacted). I changed my habits, was more aware of predatory CC’s, and lived as I was THANKFUL to have been given a second chance. Today, 8 years later? I’m a nurse, husband, and a homeowner.
@C B To me this kind of situation does contribute to the higher cost of medical care and medical insurance. Really wish to know what happens behind the scenes when it comes to people trying to refresh their life with filing for bankruptcy.
Chapter 7 was my salvation, 80k of debt 20k income. Mostly medical and credit card debt. I did not owned a house, or have a car with payments. Helped me reset and now I follow Dave's plan making more money and now totally outta debt.
Work out of the mess you got YOURSELF into! Lazy people look for lazy solutions. People can't even assume their OWN responsability anymore. You are the phisical definition of weak.
@@Justoutdoors360 Someone is paying the discharged debts - the creditors. And this affects other people indirectly and directly (employees, shareholders, founders, less taxable profits -> everyone)
My mom got cancer and had to file for bankruptcy. She had an obscenely big house and couldn't pay the bills. The only bill she made sure to pay was her life insurance. She passed 2 years ago. My son now has 50k in a TCA and he's 4yo. The house went to the bank and was just sold at auction this past spring. Stuff happens sometimes.
the only reason that bankruptcy has a negative image is because the credit card companies want you to stay in debt and accrue more interest. but whats ironic is that the second you file for bankruptcy, those same banks will send you pre-approved letters for credit cards and car loans. It happened to me when i filed for bankruptcy. You just have to make sure you don't take them up on their loan offers post-bankruptcy or else you'll be in debt again and it'll take at least another 8 years before you can file for BK again.
@@gsyarber What does the bankruptcy process look like in terms of your assets being assessed? Does someone literally show up at your place and go through your stuff? I have an old Camry that’s worth about $3k (paid in full) and about $2k worth of music gear, and about $1k in a retirement account. I rent an apartment, no other assets. Also wondering if my parents or employer would be contacted.
@clemens83 no, they won't contact anyone except your creditors. I filed 15 years ago. $40k of CC debt. They give you something like $7000 exemption so all person property youu keep because it devalues so much. They also give an auto exemption, I kept my 5 year old paid off car. It was easy. No interviews or creditors questions. Just showed up in front of judge and 6 months later got full discharge. Today I have a 822 FICO and $140k in savings.
Bankruptcy is, math-wise, the best thing to do if you're underwater/insolvent. Debt settlement is the second-best option (if you can't get a bankruptcy).
Please stop with the debt settlement. It does not work! I am speaking from experience. I am up To my eyeballs in debt because I am a single parent and got laid off for the first time one year ago. I’ve applied for almost 3,000 jobs. I am now going to have to file. Not one of my credit cards is willing to really work with me. Sure they may take off 10-20% but that does me no good. I would have thought that they would want 25-30 percent instead of nothing, but that simply is not the case!
@@thec313 In my personal experience, the person only had to pay 50%-60% of principal plus another 10%-20% in legal fees, and NO INTEREST over the MANY YEARS the settlement was going on for (I think it took 5-6 years). Before that he was paying just the minimum and so the balances grew every year with no end in sight! That's still at worst 80% of principal you pay (fees included) and 0% of the interest that would accrue during the settlement, and a *hell of a lot better than what he was doing before!* Plus you have years and years to pay it down without worrying about interest. This is not as good as the 25% _you_ want to pay, but that doesn't mean it "does not work!" Your expectations are simply too high and even the reputable debt settlement companies themselves don't advertise anything that good. Your rates are basically bankruptcy rates and the only way to get them is typically bankruptcy or moving out of the country forever.
Solon Peet … This is very true. My sister, who is disabled due to her mental illness (schizophrenia), qualifies for this program; however, she had to apply every year. This was challenging for her, due to her mental instability - staying on top of important paperwork is challenging for her, so she still owes a portion of her student loans.
M Detlef okay, thanks for the disparaging remark about my wonderful sister! She wasn’t always out there. If you were informed, you would know that it’s typical for people to show signs of schizophrenia in their late teens to early 20s. Hence, the need for student loans before her illness. 🙄
In my case Chapter 13 was a life saver. I won’t get into details, but it literally saved my life. I guess it depends on the person and what their financials are.
It can be a life saver. I agree with Dave that we should avoid it if possible, but most people who declare bankruptcy really do need to do it to reset their lives and get out from under devastating debt they can never repay. (Then, hopefully, they'll learn how money works and NOT build up that kind of debt again.) It's not a pretty option, but is often people's only option.
yadsia0426 Chemo therapy can be a life saver too but it’s not something all of us want to experience. I consider bankruptcy to be extremely painful, awful and emotionally draining experience. No one does it for fun. If you can avoid it by eating ramen noodles for a year why not. No one should go for it. It is absolutely terrible.
@@MHiggins Yes - if you can avoid it by eating Ramen noodles for a year - do it. But I've known people who suddenly found themselves $200,000 in debt due to unexpected medical bills. These were people with an income of about $35,000 a year, and children. There was absolutely no way they could have paid them. The hospitals and insurance companies refused to forgive any parts of their bills. So they declared bankruptcy. The hospital which was haranguing them for payment and refused to negotiate, suddenly lost all of the cash they were saying they were owed.
15+ years of slaving and living paycheck to paycheck to make minimum payments. No one wants to literally throw away a huge chunk of their life to make these credit card companies richer.
I just decided to negotiate a credit card debt, for many of these reasons. I emptied my savings and utilized a good return from the IRS. I’m used to not having much money, and thanks to another Dave rant, I’m not trying to make payments I can’t afford. Admittedly, I am back to baby step one, and that’s an honorable but humble foundation.
ChicagoTRS Dave recommends to keep waiting then. Give them the option, do you want to get paid and settle or do you want to sell it to collections and make even less?
I don't know Dave. It worked for you. There's certainly situations where bankruptcy helps you get back on your feet. 405,000 in medical bills isn't going to be paid from someone waiting to be approved for disability.
@@ThePeterDislikeShow waiting is the word you missed. Anything and everything he owns can be taken from him plus the cost of a civil defense lawyer. He Bankruptcy isn't the only option but known facts make it the most prudent.
Devastating? Not sure about that anymore. As someone who has had experience in running credit checks and screenings, it used to blow my mind how many had just declared bankruptcy to get rid of all their debt, and within a year had decent enough credit in the 600-700 range to be able to qualify for a mortgage, rent without a deposit, etc. Meanwhile I'm over here paying all my stuff off being poor as dirt as I work my plan and having to pay security deposits because my credit is luke warm and the rental company needs extra money and my car insurance costs more, etc. So yes for a lot of people it does fix their situation and unless they have student loans and huge medical bills they often come out of it with a clean slate and bad credit that they can easily recover within a year or so.
I filed bankruptcy. It worked out great for me, one of the best things I've ever done for myself. Chapter 7. And it wasn't as hard as he's making it sound here. But I know that varies with who is filing for you and I had a really great bankruptcy lawyer. But I respect what he is saying here. It should be possible to discharge student loans in bankruptcy, then the lenders would not make such egregious mistakes in lending and kids would not make such egregious mistakes in attending useless schools and going into debt like lemmings into lava, and without a source of free money schools would not be rocketing their prices to the moon. Also the people underwater in student loan debt would be freed to live out their lives normally. The facts that the government bails out student debt at the death of the debtor instead of before death, and that the government prevents discharge of student loans in bankruptcy, means that free market forces are not allowed to naturally control the student loan industry as they should, and millions of lives of the most promising people are lived under a cloud of debt, usually until they die. I understand there is a way out through paying them back, but for millions of people that at least feels out of reach, whether or not it actually is. For many people it literally is beyond reach. But all that said, bankruptcy is really awesome. Also although what he says about reaffirming the debt is accurate it is a game changer when you are in the catbird seat as far as deciding which debts to keep and getting rid of the secured debt that is outrageous (for example a crappy car you are under water on, where the interest rate is too high). When you are in bankruptcy your mortgage lender has a strong incentive to make a deal with you and my mortgage lender refinanced my mortgage to a much more acceptable interest rate, a fixed rate instead of variable, and extended the deal for 30 years. My mortgage became a joy to pay instead of the wolf at my door. I reaffirmed my mortgage debt and eventually paid off the house. Don't feel sorry for the lender--I paid probably in total about 3X what I borrowed for the house. You can keep the car if you need it and if the terms of your auto loan are not egregious. Your credit score usually goes *up* by about 100 points the day you file bankruptcy. Your lenders are legally required to pay you back what you have paid them in the past 90 days I believe. You get a reprieve from the debt collection calls. Yes it's true that sometimes bankruptcy is not worth it, depending on your amount and type of debt. The main problem with bankruptcy is finding a good lawyer, that and the amount of work you have to do to get ready for the bankruptcy. While I respect Dave Ramsey, it is worth pointing out that since his method involves paying back your debt he has a disincentive to advocating bankruptcy despite the fact that he has used it in his personal life, so take what he says on the issue with a grain of salt.
Bankruptcy is a lifesaver for many. My close friend filed because she went through a divorce that left her in a sinking ship. She now is on a great trajectory in life some 9 years later.
A large portion of people who go through a bankruptcy do not change their financial habits though, so just a few years after they finish on bankruptcy, they're on the verge of another one. A good deal of the time, bad habits have created the problem, and a bankruptcy won't fix those habits.
@@sconnell1791 I hear you but as you stated "Some People". For example, I was on Government Assistance for 8 months of my life. I have not gotten it again some 17 years later. Though many are labeled to have assistance for life from the government.
@@sweet_southern_gal You and this person you're referring to aren't the normal. Nearly 80% of Americans live paycheck to paycheck. I'm one of Dave's trained coaches and I work with people dealing with these types of issues, and are even considering bankruptcy, but I've been able to show them it's not a procedural thing but a behavioral thing. The fact that you escaped it is testament to the fact that there does not have to be a cycle of poverty and struggle so that's awesome you've stayed out of that. Lots of people need a mentality and reality change, though.
In my line of work, I have seen people file bankruptcy to stop a $50 dollar per month slow-pay judgement (total was $7,000) ... Bankrupting over $50 dollars a month is ASININE. Not going to bash the character of the individual that did it but they were trying to abuse the system.
@@Lilkepgames sounds terrible, but what sounds worse is paying a double interest rate mortgage resulting in thousands in extra per year. What's the saying? Don't let the tail wag the dog?
If you can't pay the debts within 5-7 years, file bankruptcy. Otherwise you are throwing good money after bad. It was the best thing that I did to save me financially.
Actually it’s a bad idea. Especially if you are struggling finding more ways to diversify your incomes while homeless. One thing all those advocating for bankruptcy don’t mention is that it does prevent your chances from renting - if you are poor and can’t yet afford to buy land and/or build your own house. Please do your research better.
I have $113K in truck payment debt. I've given back the trucks. I have $50K of cc debt. $9K back car payments. Turned in the car. $20K in IRS debt, A$10K of which is over three years old, which I'm told will go away in Ch 7. I'm being told that Ch 7 is my absolute best option, not to even consider Ch 13. Do you have any input? I'm not looking for permission, just any traps I should be on the lookout for.
If you’re in so much cc debt that you can work around the clock but the interest owed is more than you will ever be able earn, how does it not make sense to do a Chapter 13?
Bankruptcy is a bigger deal than most realize. Back in the early 80's my parents filed for chapter 7 due to a business failure. I was 17. Bankruptcy was not as common or accepted as it is now. It really does affect EVERY SINGLE thing going forward. A price is paid by all of those around you that the courts do not recognize.
I grew up in the 70's and 80's and you are right. Bankruptcy was a bigger deal back then, and it was perceived in a much more negative light back then. I remember our local newspaper would publish the names of everyone that filed for BK during the week in the Sunday paper. On top of all your problems, they made sure you suffered public shame as well.
@C B Yup, and I remember some stores wouldn't take your check if the number was too low. When you got a new checking account your first check would be like number 101, second 102, etc. Some stores wouldn't take it unless it was some higher number like 250. They wanted to know your checking account was "seasoned."
@@bindingcurve Yeah, I remember that, but that came later. I remember that the only way they would start at a later number was if you were changing banks and your checking was already seasoned. But I do remember that some banks just started doing that and eventually businesses could withdraw the funds the moment you handed over the check. At that point it didn't matter what number you were on.
I know a few people whose attitude about bankruptcy is basically "It's no biggie, it wipes the slate clean and gives people a second chance. Go for it!" These people are also bankruptcy attorneys, so...
That's very true. Those lawyers are only after the money. They couldn't care about your situation. Even if one does not need to go that route, they will still push it on you.
In California there is something called the "Wildcard" exception. If you don't own a home you can have over $30,000 in assets protected from being liquidated. Items such as your vehicle, tools, jewelry, household items, etc. I thought that was very interesting.
Bankruptcy is federal. Some states exemptions are better than federal exemptions, it just depends on the state. I ‘think’ all states have some type of wildcard exemption, but that’s not something Dave mentioned. I’m glad you did! Talking to an ATTORNEY is where people should start. I can appreciate some of Dave’s financial advise; HOWEVER, he is not an attorney. Do NOT take legal advise from someone who is not an attorney.
I haven't even watched this yet, but it's kind of like getting gastric bypass. Unless you change your lifestyle, you're just going to be back in the same situation. It needs to HURT or else you don't learn anything useful from the experience.
I’m planning to file chapter 7 I can’t keep up with my credit card debt and my stupid decisions of getting so many unsecured loans. I’m wondering how long will this keep this in my credit report? Are all cases the same ?
Going through bankruptcy was the best thing I could have ever done. If I knew it would take that much of an edge off my fears and bill collector misery I wish I would have done it years/decades earlier.
This. Bankruptcy saved my life. Filed chapter 7 in 2002, got serious about money, been doing awesome ever since. Dave wont admit it, but his biggest hangup about bankruptcy is he thinks it is stealing not to pay your debts. He'd prefer you get 3 jobs, drain yourselif physically and emotionally, just to pay back Visa. Thats BS advice.
I been though bankruptcy after a 3 year job loss in 2010 and it not worth doing. I had to turn over my income tax refund to the bankruptcy court so I ended giving them like 6 grand when I could have just took that money and paid bills off.
You should have filed Chapter 7. I just did it two months ago. I kept my house, both my cars, and my motorcycle. now have no credit card debt, no loans and I have plenty of free money now. I also have my lawyer placing me on a line of credit and my score almost back in the 700s... Lifes good right now.
The true scam is medical charges. Say hospital charges 400 for a service, insurance pays 68.50 due to negotiation and contract. However, if you have no insurance the cost is 400.00. and getting a discount is difficult. No wonder people file B/K on medical bills!
As someone with a chronic medical condition, homeless, and massive medical debt, we found out it was a big mistake to file for chapter 7. I’m so glad we didn’t.
Filed in 2012 for 30k chapter 7. 20k in credit card debt and 10k for medical debt. Best decision I ever made. I was making 38k a year at the time and the relief allowed me to pay off 18k in student loans in 1.5 years. My income slowly increased while I rebuilt my credit. Not sure why he had such a negative experience? I guess we should just struggle and stay true to the predatory lending of credit card companies and privatized health care so they can stay rich! It’s mindset that makes us think we failed. What do these credit card companies do when we file? Probably pay less in taxes for their loss. Hospitals? They lie and say we are increasing the price of healthcare for others. It’s all a mind game. Do the math. For some of you bankruptcy means relief, hope and freedom. You are a person. These are for profit companies trying to squeeze every dollar from us.
That’s the real problem. Bankruptcy does nothing to fix the people who really need it. The easy fix to student loan debt, is to make it dischargeable in a Bankruptcy, not to let irresponsible people off, but to stop banks from loaning money to people that no sane person would loan to, except that they know it is excepted from bankruptcy.
I filed Chapter 13 in December. It's a 100% repayment plan, and it's not as stressful as he is making it sound. It's a filling out some document, lowering your overall payments amount, and you dont have to pay student loans while in bankruptcy.
You should talk to an ATTORNEY either way. Dave is not an attorney and he cannot give legal advise. I’m a bankruptcy paralegal, and he did a very poor job at discussing chapter 13s. There are so many options such as cramdown and redemption that he didn’t mention. If anyone is considering bankruptcy, please talk to an attorney.
If you have over 40k in credit card debt just file. Keep everything else but getting rid of that card debt will free up thousands a year. Even if it’s a chapter13 your payment is far lower than trying to pay it in full. Also, if your lawyer is good you can make 6 figures a year and file Chapter 7 on 30-40k of debt. I know. I did it. You do NOT have to do a Chapter 13 just because you have a high income.
Vile Nation Gaming I’m thinking of filing chapter 7, I have 90k in credit card debt. I’ve been paying the minimum. Should I stop paying the minimum and let it go into collections then file or just file now?
@@DanielIles There is nothing knowledgeable about telling people to stop spending and dump all their money into paying off debt. Just like Gary V. Their is nothing knowledgeable about telling people to work nonstop.
Dave, at least you should make it clear to your audience that your reasoning not to recommend filing bankruptcy is dependent on each individual situation. I clearly understood your explanation. How about if an individual owing $25,000 credit card, $50,000 car loan and works par time and with no assurance when he/she will find good paying full time job? And the wage he/she earn on his/her part time is barely cover his/her expenses, not much left for other bills?
Dave used bankruptcy to achieve the success he has today. He also has a business that competes with bankruptcy, so he has a vested interest in you not filing and buying his system. Not sure why he mentions what bankruptcy does not stop, since that's not what it's for.
Exactly if you have extreme credit card debt just file. More than likely you will free up enough money to then be able to afford everything else without struggling
I went through a 5 year chapter 13. We are one of the rare few who actually received a discharge. It gained us absolutely nothing. We only had $1,300 in unsecured debt, the rest was secured. We got some really bad advice to file. After attorney fees, trustee fees and court fees it actually cost us more to file. During that 5 years I hated life. It’s truly a miracle my husband and I didn’t get a divorce. I wouldn’t recommend it to anyone.
Chapter 13 is not advisable but Chapter 7 is completely different. Most people wipe out all of their debts and they get a fresh start. Going through it is hard but after all debt is wiped out they feel in heaven! And if they are smart in 2 or 3 years after bk their Fico credit score is up in the high 600s or low 700s. Some people even get pre approved invitations for credit cards just one year after chapter 7 bks.
@@wlonsdale1 had almost the same problem I owed Arrears on the house and a car payment i could not afford. Us bank would not talk to me about geting caught up. the 13 save my life.
I went through a divorce, got sick, lost my job. I had the means to pay what I owed when I borrowed it. I probably could have payed off that original debt without all the late fees. I was forced into Chapter 7. Ten years later I have a FICO of 814, my house and cars are paid for. I have a 0% loan, balance of $1300. No other debt. I'm not an irresponsible bum. I'm an example of why we have bankruptcy laws.
Could he be against it cause of an alterior motive? Working more isn't an option for some. Heck, with the price of daycare alone, a stay at home mom is a better option than both going to work and paying for daycare or aftercare.
i was in a very similar situation as you a few years ago and i just declared chapter 7 bankruptcy and had all of my unsecured debts discharged. it takes at least 3 months but it's worth it.
Dave preaches to lowest common denominator. You can play bankruptcy smart just like Divorce . Longer you wait the worse it gets . Play smart , don’t wait to long and bankruptcy can just be good business .
Thanks Dave for another super message. I feel as if you owe the money one way or another. I would hate to think I couldn't pay off my debtors. II would rather work until I drop dead trying to pay people back. One of the reasons I started by YT channel to document my journey!
I'm disturbed by some of the attitude in this section. How is going through bankruptcy yourself and then recommending against it a bad thing? I mean for the people who say, "Dave doesn't know what he's talking about" "Dave dosn't understand his audience" " if dave talked about it on the show advertisers would pull out -- it's all about making money" I don't 100% agree with everything Dave says (that's true of everyone with me), but if someone actually went through something and then advises against it...doesn't that point hold more merit?
He is stating that so you won't have to go through that not condemn you for doing it. He is also trying to help people from repeating bad decisions and not enabling them to be irresponsible.
Daughter of the King you're correct! I have a cousin who filed and it was the best move she ever made. I guess it depends on what state you're in. She live in Texas She kept her home, cars and furniture with chapter 7...
I think I agree with your statement. Reverse 30 yrs.... I bet Dave with his mindset of today, would still file for BK again.... BK works.... just have to wise up and not make same mistakes over again.....
All of your unsecured debts are wiped out in a chapter 7. You get to keep a certain amount of personal property to start over with, It varies by state. Any property that you have that is in excess of your protected property (called exempt property) must be turned over to the trustee or bought back from him. Any money the trustee gets gets distributed to creditors on a pro-rata basis, less his fees. Most people do not have to pay anything. Federal rules provide that people with a household income above the median income for their state for their family size have to pay their monthly disposable income (determined by a formula) to their creditors for 5 years. There is also a voluntary reorganization bankruptcy to do things like save your house if its in foreclosure where the missed payments are amortized over a 3 to 5 year period.
I’m currently in a chapter 13 bankruptcy and 85% of the creditors failed to file a proof of claim. I was told that a voluntary dismissal may be the best option and to just pay off the debt that’s left. Anyone have any insight on this?
Yes, sometimes creditors fail to claim or just dismiss it and you have to make payments only on those creditors who filed claims on your chapter 13. The creditors that fail to file cannot come after you later on.
Just don't buy stupid stuff that you cannot pay for.Don't loan any money for anything unless you're absolutely sure that you can pay it back. It's not that hard....
People file bankruptcy for many reasons. Try having a baby with medical issues that gets RSV , Croup, Influenza, and Jaundice, all in a span of 18 months. Has to be hospitalized at a children’s hospital. The medical debt is insane. Even with ‘good’ insurance. It’s not the family’s fault, they didn’t do anything wrong.
I’m betting much of chapter 7 no assets filings are related to predatory credit card (unsecured) debt. Many of these credit cards are cost in states that don’t have usury laws. One could argue that an individual should not take out such credit cards. My reply is water over the bridge and bankruptcy is a great way to get these predators to go away.
I really want to do a Chapter 7 bankruptcy as long as it works out the way that I think it will. I make a little over $750 a month on SSI which is basically disability which according to my research is exempt. I have no house I have no car I have no boat as he mentions I have no property of any kind other than VHS DVD/book sets that and the VCR/DVD player are the only property that I own. I am a single guy that does not have a family and does not expect to have a family within the next seven years. I do not plan on buying a house because there’s no way I could afford a house. As far as my debt I have about $30,000 on credit cards which again according to my research gets wiped out no problem and I have no assets
@@meaganmccullah8882 I did talk to a couple nobody wanted to take it because I have nothing to protect and they told me my SSI is protected so it wasn’t worth their time. They are trying to help people who are at risk for losing their property. And told me to tell them they can go pound sand
@@meaganmccullah8882 since somebody just recently commented on this, bringing it back to the top and making me notice it, I just saw your comment. I did try talking to multiple attorneys at the time that I posted this and no lawyer would take my case stating it wasn’t worth their time because I had nothing to try to protect. So there’s no reason to waste a lawyers time if the creditors can’t get anything out of it. So after two years, one of my creditors has finally taking me to court I showed up for the virtual court case told the judge everything I have told the creditors since day one, including what the lawyers told me and she says she understands the situation but that’s not an excuse for not paying back the debt and so she did issue the judgment and they have every right to try to get the money. But again my question is is the only income I have, and will have for the foreseeable future, they do know they’re just wasting their time right? You can’t squeeze money out of a rock. I would love to file bankruptcy and be done with this foolishness, but no lawyer wants to waste the time and so now I’ll just be ignoring phone calls for the next who knows how many years 😂
It's not true. Bankruptcy is not devastating for most people. If bankruptcy was that devastating, hardly anyone would file a petition to declare bankruptcy.
Although bankruptcy can be a lifesaver, it stays on your credit history for 7 years, which could cause many more issues down the road. Definitely depends on the situation!
It's only 2 years after your fixed for bankruptcy. The day starts the day you actually file. Most end up in bankruptcy for five years just wait two more years and everything will go back to normal
That’s only if you don’t get a lawyer who can remove it. I know 4 people right now who had it removed after their discharge and were able to buy homes cars etc for low interest rates after about 6 months
I filed bankruptcy because my sister in law stold my identity and bought a house then they would not take it off my credit I have also lost my job so afterwards still had student loans to pay off
Dont blame him one bit even though some callers really have no chance other than giving up. Their fault or not I wouldn't tell anyone when to throw THEIR towel in.
Funny thing is, people are complaining that chapter 13 made them pay more or took thier tax return, etc. But ive yet to see one person actually own up to the debts. Its your debt so you should have to pay it. Chapter 13 is a plan and an interest free one at that, so its a better option than paying years of interest, etc. It also forces you to stay on track. If youre lucky enough to be able to do a 100% plan, then they really won't even bother you.
I agree with you. Everyone's situation is different. Things happen: lost of job, medical bills,identity theft, family deaths,etc. Should I have to work 3 jobs for 10 or 20yrs to try to pay off bills? What about food,electricity,rent,etc.,what happens to those bills. Should I live in the streets & drink water from fire hydrants & look for food in dumpsters while working those 3 jobs?? For people facing these issues, bankruptcy is the only solution...
Dave. I have done both. I filed for divorce for taking my money and assets. And laughing at me because her boyfriend was a better lover. And I filed for bankruptcy with chapter 7. I had zero assets after that divorce and up to my butt in debt because I put her on my charge cards. So I had nothing to lose by doing so. Ten years of bad history but I was free in year 11. Now considered upper income by Pew Research. I can clearly say to any man reading this, divorce that Karen now and declare Chapter 7 bankruptcy if you need to. Divorce is super and so is bankruptcy. Unless you want to be a forever slave to some Karen and the debt holders. NEVER DELAY DIVORCE OR BANKRUPTCY.
My fiance has filed for bankruptcy twice in his life. Now he is in debt again and his credit cards are maxed out. Has he learnt. Nope! I don't think any one learns life financial lessons from being rescued.
That's not true. I know a few people including my best friend who filed bankruptcy and never ever again incurred in credit card debt. Don't generalize. Even Dave is an example!
If you think about it, a lot of the time, divorce is an act of hope. An unhappy, broken marriage that leads UP to a divorce is the 'hell' part...the divorce means that they're changing their behavior and moving on with their lives because they've acknowledged that what they were doing wasn't working. I'm not suggesting that it should be the first thing you try. Of course, you should do counseling and try to fix it...but if you can't, staying together for another 30-50 years makes no sense.
What if someone decides to strategically accrue very specific types of debts (like credit card debts), with the specific aim to file for bankruptcy. This way, you can say live for a specific period of time, like go on a few vacations, and then just file for bankruptcy to remove the debts. So, the person is not taking stupid debts like a car loan, and he/she is making minimum payments while borrowing hundreds of thousands of dollars in debt. What is wrong with that? I know that doing this is morally wrong, and I would never do it. I just want to know what negative a person doing this would face. I just want to know why the option of bankruptcy should even exist. It just seems like a "get out of jail free" card that can be abused.
Pra Baj The bankruptcy courts are there to help people try to get back on track. It is there to save marriages and lives. Isn’t it nice for a change there is a court system that isn’t out there to give retribution as its sole means.
Also aren’t the banks kinda in the same. I remember 10 years ago banks made a lot of bad decisions then went to the government asking for bailouts for their own bad decisions. It goes both ways too.
I think it would be hard to get hundreds of thousands in unsecured debts. That person probably has high income and a good credit score. So when that person files for bankruptcy, they damage their credit score PLUS they probably have to make a monthly minimum based on their income. Over the course of 5 years, idk if it is even worth it.
Sometimes you do what you have to . & what’s best for you. Sometimes bankruptcy maybe a person’s only out . Everything else didn’t work out or what ever the case maybe.
Dave, I have been a single parent of three the last five years and my credit report shows I had lost a house and went to an apartment temporarily where I gave a 30 day notice and they unethically on my report put that I did not enter and now that is derogatory and makes it hard for me to rent away from that my salaries been way too low and yes sadly I have three car loans Long story there but I do have two teenagers that drive one will be driving soon and we’re coordinating who’s gonna take on what but in the meantime, I do have about 6000 in credit card debt and then just a couple personal loans of 1000 but my salary is just not where it needs to be but it could possibly change and be back to what it should be. I’m only a month behind on a couple cars if that How do I get this derogatory Apartmentt off of my credit report so that it’s not hard for me to rent as I’m having to move out of the house. I am on the title for long story there as well and it’s hard to get approved because of that I was thinking of filing bankruptcy just so that would be cleared off my report the derogatory Apartmentt report they’re saying I owe $4000 because of moving out early I appreciate your guidance and help so much because I would love to not file bankruptcy, but my expenses are around 6500 with the cars and rent that I will be having of 1800 starting February and other expenses and credit cards I only bring in 55,000 right now it will hopefully change. Thank you so much. Look forward to your help.
How do I contact to ask a question. I've been considering bankruptcy and only have credit card and loan (not student) debt and I have then already approved too try to garnish wages but I lost my job and have no wages
as long as you dont have a job there is no m0ney to get. if they want to get mean and nasty they can go back to court and start taking tV and other things you might have that is worth money. 90% of the time they dont
I am a retired person. My financial institution told me that my CD can be withdrawn without penalty by a certain date. What is the best action to take on a CD?
Unless your CD is way over market on the interest rate (4% APY or higher), you are better off keeping it in a Money Market account that is FDIC insured. But really, if you don't need the liquidity and already have an emergency fund then use that money to invest in something like a good mutual fund or property.
I filed in 2011. Best decision I made. Kept the car debt since it was 6 months from being payed off (which I actually gave to family member 2 years prior whom was still paying). So they were safe.
No more late night calls, no more worry. I had a few new friend/aquatints that would ultimately be the difference in my success later on, and I was glad to be free and they were also no longer being called (even though I barley met them, they were still somehow being contacted).
I changed my habits, was more aware of predatory CC’s, and lived as I was THANKFUL to have been given a second chance.
Today, 8 years later? I’m a nurse, husband, and a homeowner.
Me too brother! It pretty much saved my life. Good for you!
Which chapter bankruptcy did you file ?
How much debt did you have?
Too bad you didn't have what it took to be a doctor.
Too bad you didn't have what it took to be a doctor.
75% of the people who call Dave for help would be poor candidates for bankruptcy as they usually have student loan's as their largest debt.
Ryan De Witt that’s probably true. Unforgivable
ACCURATE. its sad.
True
As it should be.
@C B To me this kind of situation does contribute to the higher cost of medical care and medical insurance. Really wish to know what happens behind the scenes when it comes to people trying to refresh their life with filing for bankruptcy.
Chapter 7 was my salvation, 80k of debt 20k income. Mostly medical and credit card debt. I did not owned a house, or have a car with payments. Helped me reset and now I follow Dave's plan making more money and now totally outta debt.
dude im literally in that same boat right now. 80k cc debt 24k income home 280k debt going to foreclosure.
stressing I just want a reset so bad
@@brianmcandrew9957 bankruptcy will help you
@@brianmcandrew9957 How did they get you approved for a home with 24k?
80K of debt from pandemic fallout . I'd rather choose voluntary bankruptcy then give the debtor the upper hand .IMO
I did. 2yrs later much better situation with a new home. I'm glad I did it
if referring to bankruptcy, you were lazy. Divorce, different story.
Work out of the mess you got YOURSELF into! Lazy people look for lazy solutions. People can't even assume their OWN responsability anymore. You are the phisical definition of weak.
congratulations as long as you learned the lesson, thats what matters. The haters in the comment section are just envious.
@@MikaelaSimone agree, to each it's own. Everyone's situation is different.
@M Detlef thank you sir!
Bankruptcy could be a life relief on some cases, there’s people who can’t sleep because of debts.
but always on the cost of other people
@@0xMetriopatheia How so?
@@Justoutdoors360 Someone is paying the discharged debts - the creditors. And this affects other people indirectly and directly (employees, shareholders, founders, less taxable profits -> everyone)
@@0xMetriopatheia no it doesn’t, banks made that money 10 times or more, that’s an asset and they use it as a tax write off.
@@0xMetriopatheiayou have no idea what you are talking about and how charged off debt works.
My mom got cancer and had to file for bankruptcy. She had an obscenely big house and couldn't pay the bills. The only bill she made sure to pay was her life insurance. She passed 2 years ago. My son now has 50k in a TCA and he's 4yo. The house went to the bank and was just sold at auction this past spring. Stuff happens sometimes.
I DECLARE BANKRUPTCY!!!
Michael scott!
I love The Office reference 🤣🤣🤣
I didn't say it, I declared it!
I surrender!
Michael you can’t just say you declare bankruptcy
the only reason that bankruptcy has a negative image is because the credit card companies want you to stay in debt and accrue more interest. but whats ironic is that the second you file for bankruptcy, those same banks will send you pre-approved letters for credit cards and car loans. It happened to me when i filed for bankruptcy. You just have to make sure you don't take them up on their loan offers post-bankruptcy or else you'll be in debt again and it'll take at least another 8 years before you can file for BK again.
That's why they do that! Because they know you can't file for bankruptcy for a long time.
Bankruptcy is NOT life altering. Give me a break. It’s a viable option instead of digging out of a hole at any cost. Easiest thing I have ever done.
What?
I think it speaks for itself. You speak English right?
@@gsyarber What does the bankruptcy process look like in terms of your assets being assessed? Does someone literally show up at your place and go through your stuff? I have an old Camry that’s worth about $3k (paid in full) and about $2k worth of music gear, and about $1k in a retirement account. I rent an apartment, no other assets. Also wondering if my parents or employer would be contacted.
@clemens83 no, they won't contact anyone except your creditors. I filed 15 years ago. $40k of CC debt. They give you something like $7000 exemption so all person property youu keep because it devalues so much. They also give an auto exemption, I kept my 5 year old paid off car. It was easy. No interviews or creditors questions. Just showed up in front of judge and 6 months later got full discharge. Today I have a 822 FICO and $140k in savings.
TRUE !!
Bankruptcy is, math-wise, the best thing to do if you're underwater/insolvent. Debt settlement is the second-best option (if you can't get a bankruptcy).
Please stop with the debt settlement. It does not work! I am speaking from experience. I am up
To my eyeballs in debt because I am a single parent and got laid off for the first time one year ago. I’ve applied for almost 3,000 jobs. I am now going to have to file. Not one of my credit cards is willing to really work with me. Sure they may take off 10-20% but that does me no good. I would have thought that they would want 25-30 percent instead of nothing, but that simply is not the case!
@@thec313 In my personal experience, the person only had to pay 50%-60% of principal plus another 10%-20% in legal fees, and NO INTEREST over the MANY YEARS the settlement was going on for (I think it took 5-6 years). Before that he was paying just the minimum and so the balances grew every year with no end in sight!
That's still at worst 80% of principal you pay (fees included) and 0% of the interest that would accrue during the settlement, and a *hell of a lot better than what he was doing before!* Plus you have years and years to pay it down without worrying about interest. This is not as good as the 25% _you_ want to pay, but that doesn't mean it "does not work!" Your expectations are simply too high and even the reputable debt settlement companies themselves don't advertise anything that good. Your rates are basically bankruptcy rates and the only way to get them is typically bankruptcy or moving out of the country forever.
Bankruptcy wouldn't even help me since my only debt is a student loan.
Solon Peet … This is very true. My sister, who is disabled due to her mental illness (schizophrenia), qualifies for this program; however, she had to apply every year. This was challenging for her, due to her mental instability - staying on top of important paperwork is challenging for her, so she still owes a portion of her student loans.
M Detlef same reason some one gives an idiot a RUclips account.
M Detlef okay, thanks for the disparaging remark about my wonderful sister! She wasn’t always out there. If you were informed, you would know that it’s typical for people to show signs of schizophrenia in their late teens to early 20s. Hence, the need for student loans before her illness. 🙄
Thunder Cat - thank you. 😊
@M Detlef Umm.. it was about you calling my sister a "nutball."
In my case Chapter 13 was a life saver. I won’t get into details, but it literally saved my life. I guess it depends on the person and what their financials are.
It can be a life saver. I agree with Dave that we should avoid it if possible, but most people who declare bankruptcy really do need to do it to reset their lives and get out from under devastating debt they can never repay. (Then, hopefully, they'll learn how money works and NOT build up that kind of debt again.) It's not a pretty option, but is often people's only option.
yadsia0426 Chemo therapy can be a life saver too but it’s not something all of us want to experience. I consider bankruptcy to be extremely painful, awful and emotionally draining experience. No one does it for fun. If you can avoid it by eating ramen noodles for a year why not. No one should go for it. It is absolutely terrible.
@@MHiggins Yes - if you can avoid it by eating Ramen noodles for a year - do it. But I've known people who suddenly found themselves $200,000 in debt due to unexpected medical bills. These were people with an income of about $35,000 a year, and children. There was absolutely no way they could have paid them. The hospitals and insurance companies refused to forgive any parts of their bills. So they declared bankruptcy. The hospital which was haranguing them for payment and refused to negotiate, suddenly lost all of the cash they were saying they were owed.
Nils from Alaska medical debt is a fear of mine that’s why I left my old job to a new job to cover the cost of major health issues if it pops up.
yadsia0426@ I agree bankruptcy was a lifesaver for me, and I filed it myself.
There’d be a lot less bankruptcy if credit card companies weren’t charging 20-30% interest. That’s an insane rate.
The rates are out of control. How can anyone dig out when their entire payment is mostly going towards the interest?
Compound interest like 50 percent interest
15+ years of slaving and living paycheck to paycheck to make minimum payments. No one wants to literally throw away a huge chunk of their life to make these credit card companies richer.
I just decided to negotiate a credit card debt, for many of these reasons. I emptied my savings and utilized a good return from the IRS. I’m used to not having much money, and thanks to another Dave rant, I’m not trying to make payments I can’t afford. Admittedly, I am back to baby step one, and that’s an honorable but humble foundation.
Were you able to settle the credit card debt?
One case where bankruptcy tends to make sense is when you have huge medical debt...
He’s discussed this. They’ll settle for .10 on the $1.
@Matt Enderle (sometimes)...my fiance has some medical debt in collections and do not seem to want to negotiate at all.
ChicagoTRS Dave recommends to keep waiting then. Give them the option, do you want to get paid and settle or do you want to sell it to collections and make even less?
@@mattenderle1766 bingo. Healthcare debts can be negotiated. Some people have seen 90k healthcare debts go to 15k...
@@JK20239 Yep. Heard the same by a guy who got attacked while between jobs and ended up with $115k in medical debt. He negotiated it down to $12k.
I don't know Dave. It worked for you. There's certainly situations where bankruptcy helps you get back on your feet. 405,000 in medical bills isn't going to be paid from someone waiting to be approved for disability.
BOOM!
But disability can't be garnished. What are you trying to achieve?
@@ThePeterDislikeShow waiting is the word you missed. Anything and everything he owns can be taken from him plus the cost of a civil defense lawyer. He Bankruptcy isn't the only option but known facts make it the most prudent.
THats the common theme I've heard, If medical bills are too much you file bankruptcy.
He didn’t say NEVER. Listen to the actual video. He is advising against it, advising it as a LAST RESORT.
Companies file bankruptcy all the time. The US govt steadily increasing its debt by trillions and here we are telling people not to do the same 😐
Amen.... "Too Big Too Fail"
Totally not the same thing
Devastating? Not sure about that anymore. As someone who has had experience in running credit checks and screenings, it used to blow my mind how many had just declared bankruptcy to get rid of all their debt, and within a year had decent enough credit in the 600-700 range to be able to qualify for a mortgage, rent without a deposit, etc. Meanwhile I'm over here paying all my stuff off being poor as dirt as I work my plan and having to pay security deposits because my credit is luke warm and the rental company needs extra money and my car insurance costs more, etc. So yes for a lot of people it does fix their situation and unless they have student loans and huge medical bills they often come out of it with a clean slate and bad credit that they can easily recover within a year or so.
For us, with our medical debts and student loans, and being homeless, it doesn’t work. I’m very glad we are not filing for bankruptcy.
And probability has it that those same people end up in the same financial mess. Again.
@@EmilyGloeggler7984you are homeless, companies won’t touch you with a ten foot pole.
I filed bankruptcy. It worked out great for me, one of the best things I've ever done for myself. Chapter 7. And it wasn't as hard as he's making it sound here. But I know that varies with who is filing for you and I had a really great bankruptcy lawyer. But I respect what he is saying here.
It should be possible to discharge student loans in bankruptcy, then the lenders would not make such egregious mistakes in lending and kids would not make such egregious mistakes in attending useless schools and going into debt like lemmings into lava, and without a source of free money schools would not be rocketing their prices to the moon. Also the people underwater in student loan debt would be freed to live out their lives normally. The facts that the government bails out student debt at the death of the debtor instead of before death, and that the government prevents discharge of student loans in bankruptcy, means that free market forces are not allowed to naturally control the student loan industry as they should, and millions of lives of the most promising people are lived under a cloud of debt, usually until they die.
I understand there is a way out through paying them back, but for millions of people that at least feels out of reach, whether or not it actually is. For many people it literally is beyond reach.
But all that said, bankruptcy is really awesome.
Also although what he says about reaffirming the debt is accurate it is a game changer when you are in the catbird seat as far as deciding which debts to keep and getting rid of the secured debt that is outrageous (for example a crappy car you are under water on, where the interest rate is too high). When you are in bankruptcy your mortgage lender has a strong incentive to make a deal with you and my mortgage lender refinanced my mortgage to a much more acceptable interest rate, a fixed rate instead of variable, and extended the deal for 30 years. My mortgage became a joy to pay instead of the wolf at my door. I reaffirmed my mortgage debt and eventually paid off the house. Don't feel sorry for the lender--I paid probably in total about 3X what I borrowed for the house. You can keep the car if you need it and if the terms of your auto loan are not egregious.
Your credit score usually goes *up* by about 100 points the day you file bankruptcy. Your lenders are legally required to pay you back what you have paid them in the past 90 days I believe. You get a reprieve from the debt collection calls. Yes it's true that sometimes bankruptcy is not worth it, depending on your amount and type of debt. The main problem with bankruptcy is finding a good lawyer, that and the amount of work you have to do to get ready for the bankruptcy.
While I respect Dave Ramsey, it is worth pointing out that since his method involves paying back your debt he has a disincentive to advocating bankruptcy despite the fact that he has used it in his personal life, so take what he says on the issue with a grain of salt.
Bankruptcy is a lifesaver for many. My close friend filed because she went through a divorce that left her in a sinking ship. She now is on a great trajectory in life some 9 years later.
A large portion of people who go through a bankruptcy do not change their financial habits though, so just a few years after they finish on bankruptcy, they're on the verge of another one. A good deal of the time, bad habits have created the problem, and a bankruptcy won't fix those habits.
@@sconnell1791 I hear you but as you stated "Some People". For example, I was on Government Assistance for 8 months of my life. I have not gotten it again some 17 years later. Though many are labeled to have assistance for life from the government.
@@sweet_southern_gal You and this person you're referring to aren't the normal. Nearly 80% of Americans live paycheck to paycheck. I'm one of Dave's trained coaches and I work with people dealing with these types of issues, and are even considering bankruptcy, but I've been able to show them it's not a procedural thing but a behavioral thing. The fact that you escaped it is testament to the fact that there does not have to be a cycle of poverty and struggle so that's awesome you've stayed out of that. Lots of people need a mentality and reality change, though.
@@sconnell1791 I totally agree, I had to do lots of inner work!
@M Detlef oh that's what happened? Ok 😂
Most of my family members filed for bankruptcy & filed for divorce numerous times. They both are *HORRIBLE* !
Most of your family is unsuccessful and not smart enough. You guys are broke and not very intelligent
In my line of work, I have seen people file bankruptcy to stop a $50 dollar per month slow-pay judgement (total was $7,000) ... Bankrupting over $50 dollars a month is ASININE. Not going to bash the character of the individual that did it but they were trying to abuse the system.
I wouldn't be surprised if they ended up paying more in higher interests in the long run doing that
billion dollar companies do it all the time
@@Excalibur250 a month for 15 years, sounds exciting doesn’t it.
@@Lilkepgames sounds terrible, but what sounds worse is paying a double interest rate mortgage resulting in thousands in extra per year.
What's the saying? Don't let the tail wag the dog?
If you can't pay the debts within 5-7 years, file bankruptcy. Otherwise you are throwing good money after bad. It was the best thing that I did to save me financially.
Actually it’s a bad idea. Especially if you are struggling finding more ways to diversify your incomes while homeless. One thing all those advocating for bankruptcy don’t mention is that it does prevent your chances from renting - if you are poor and can’t yet afford to buy land and/or build your own house. Please do your research better.
This is smart
What if you are about to be in foreclosure
Thank you for this idea 💡
I have $113K in truck payment debt. I've given back the trucks. I have $50K of cc debt. $9K back car payments. Turned in the car. $20K in IRS debt, A$10K of which is over three years old, which I'm told will go away in Ch 7. I'm being told that Ch 7 is my absolute best option, not to even consider Ch 13. Do you have any input? I'm not looking for permission, just any traps I should be on the lookout for.
IRS is not going away
If you’re in so much cc debt that you can work around the clock but the interest owed is more than you will ever be able earn, how does it not make sense to do a Chapter 13?
Bankruptcy is a bigger deal than most realize. Back in the early 80's my parents filed for chapter 7 due to a business failure. I was 17. Bankruptcy was not as common or accepted as it is now. It really does affect EVERY SINGLE thing going forward. A price is paid by all of those around you that the courts do not recognize.
I grew up in the 70's and 80's and you are right. Bankruptcy was a bigger deal back then, and it was perceived in a much more negative light back then. I remember our local newspaper would publish the names of everyone that filed for BK during the week in the Sunday paper. On top of all your problems, they made sure you suffered public shame as well.
@C B Yup, and I remember some stores wouldn't take your check if the number was too low. When you got a new checking account your first check would be like number 101, second 102, etc. Some stores wouldn't take it unless it was some higher number like 250. They wanted to know your checking account was "seasoned."
@@whiskers78753 till the banks got smart and you could request that your check started at number thousand or 1252 whatever you wanted
@@bindingcurve Yeah, I remember that, but that came later. I remember that the only way they would start at a later number was if you were changing banks and your checking was already seasoned. But I do remember that some banks just started doing that and eventually businesses could withdraw the funds the moment you handed over the check. At that point it didn't matter what number you were on.
@C B sheesh lol
*The easy way out rarely teaches the best lessons*
Dave doesn’t want us to have to learn something twice.
I filed and learned from it. Depends on who it is!
My thoughts exactly!
The majority don't. That's Dave's audience. The chronically idiotic.
Patently ridiculous. I’m waiting to hear from a bankruptcy atty on this thread and unless you are one I’m guessing you don’t know much about if
I can assure you that there is NOTHING about true, legitimate bankruptcy that could be called an "easy way out".
I know a few people whose attitude about bankruptcy is basically "It's no biggie, it wipes the slate clean and gives people a second chance. Go for it!" These people are also bankruptcy attorneys, so...
Chris House and they make a lot of money... it’s all about incentives. Check out my chan if you get a second chris
Chris House the easy way out doesn’t teach you as much as working out of it
That's very true. Those lawyers are only after the money. They couldn't care about your situation. Even if one does not need to go that route, they will still push it on you.
My bk lawyer helped me out for FREE
Not true, most people who say that have benefited from getting their slate wiped clean.
In California there is something called the "Wildcard" exception. If you don't own a home you can have over $30,000 in assets protected from being liquidated. Items such as your vehicle, tools, jewelry, household items, etc. I thought that was very interesting.
Bankruptcy is federal. Some states exemptions are better than federal exemptions, it just depends on the state. I ‘think’ all states have some type of wildcard exemption, but that’s not something Dave mentioned. I’m glad you did! Talking to an ATTORNEY is where people should start. I can appreciate some of Dave’s financial advise; HOWEVER, he is not an attorney. Do NOT take legal advise from someone who is not an attorney.
I haven't even watched this yet, but it's kind of like getting gastric bypass. Unless you change your lifestyle, you're just going to be back in the same situation. It needs to HURT or else you don't learn anything useful from the experience.
I don’t always agree with you, but this has been one of the best explanations against filing for bankruptcy.
I went through a ch13 and I thank God for the option
I’m planning to file chapter 7 I can’t keep up with my credit card debt and my stupid decisions of getting so many unsecured loans. I’m wondering how long will this keep this in my credit report? Are all cases the same ?
Going through bankruptcy was the best thing I could have ever done. If I knew it would take that much of an edge off my fears and bill collector misery I wish I would have done it years/decades earlier.
This. Bankruptcy saved my life. Filed chapter 7 in 2002, got serious about money, been doing awesome ever since. Dave wont admit it, but his biggest hangup about bankruptcy is he thinks it is stealing not to pay your debts. He'd prefer you get 3 jobs, drain yourselif physically and emotionally, just to pay back Visa. Thats BS advice.
The problem with trying everything else first is that it can worsen your position to file BK. Especially if you raid retirement accounts.
Yep. Then you may still end up needing to file. Great comment.
I been though bankruptcy after a 3 year job loss in 2010 and it not worth doing. I had to turn over my income tax refund to the bankruptcy court so I ended giving them like 6 grand when I could have just took that money and paid bills off.
Lol
Shoulda done chapter 7.
Wow... it still went toward your bills anyways. What's the difference?
So why did you do it lol?
You should have filed Chapter 7. I just did it two months ago. I kept my house, both my cars, and my motorcycle. now have no credit card debt, no loans and I have plenty of free money now. I also have my lawyer placing me on a line of credit and my score almost back in the 700s... Lifes good right now.
I got an ad for a bankruptcy attorney lol.
Same.
Gotta love RUclips! 😂😂😂
The true scam is medical charges. Say hospital charges 400 for a service, insurance pays 68.50 due to negotiation and contract. However, if you have no insurance the cost is 400.00. and getting a discount is difficult. No wonder people file B/K on medical bills!
Yeah. Chronic Illness very bankrupting.
As someone with a chronic medical condition, homeless, and massive medical debt, we found out it was a big mistake to file for chapter 7. I’m so glad we didn’t.
Filed in 2012 for 30k chapter 7. 20k in credit card debt and 10k for medical debt. Best decision I ever made. I was making 38k a year at the time and the relief allowed me to pay off 18k in student loans in 1.5 years. My income slowly increased while I rebuilt my credit.
Not sure why he had such a negative experience? I guess we should just struggle and stay true to the predatory lending of credit card companies and privatized health care so they can stay rich!
It’s mindset that makes us think we failed. What do these credit card companies do when we file? Probably pay less in taxes for their loss. Hospitals? They lie and say we are increasing the price of healthcare for others. It’s all a mind game.
Do the math. For some of you bankruptcy means relief, hope and freedom. You are a person. These are for profit companies trying to squeeze every dollar from us.
200 views - I feel everybody in the United States should watch this. There is so much ignorant misinformation about bankruptcy.
That’s the real problem. Bankruptcy does nothing to fix the people who really need it. The easy fix to student loan debt, is to make it dischargeable in a Bankruptcy, not to let irresponsible people off, but to stop banks from loaning money to people that no sane person would loan to, except that they know it is excepted from bankruptcy.
I filed Chapter 13 in December. It's a 100% repayment plan, and it's not as stressful as he is making it sound. It's a filling out some document, lowering your overall payments amount, and you dont have to pay student loans while in bankruptcy.
Most people in the US file for bankruptcy is because of medical expenses.
I filed bankruptcy because I got hit with a $3,800 IRS bill. My plan was to settle all my debt with the creditors until that happened
@@RenePerez-pu4cj for 4 grand? You could get a 2nd job and earn that in no time.
@robertbslee Even if it is income tax debt?
loss of job for medical reasons (unable to pay medical expenses) that's the reason
All I'm hearing is check if your debt is able to be erased, and if it can, do it.
You should talk to an ATTORNEY either way. Dave is not an attorney and he cannot give legal advise. I’m a bankruptcy paralegal, and he did a very poor job at discussing chapter 13s. There are so many options such as cramdown and redemption that he didn’t mention. If anyone is considering bankruptcy, please talk to an attorney.
If you have over 40k in credit card debt just file. Keep everything else but getting rid of that card debt will free up thousands a year. Even if it’s a chapter13 your payment is far lower than trying to pay it in full.
Also, if your lawyer is good you can make 6 figures a year and file Chapter 7 on 30-40k of debt. I know. I did it. You do NOT have to do a Chapter 13 just because you have a high income.
Vile Nation Gaming I’m thinking of filing chapter 7, I have 90k in credit card debt. I’ve been paying the minimum. Should I stop paying the minimum and let it go into collections then file or just file now?
@@jamestan662 file asap. if it were me and i had 90k worth of cc debt (i have 50k ish), i would file now.
Did you file both, Ch 13 & Ch 7? Or just Ch 7?
If you borrow money, it should be paid back...period 🙄👎
Then why did Dave file bankruptcy ?
Big Red he wasn’t always so knowledgeable
Daniel Iles - Small Business No if he supported filing bankruptcy his business would take a financial hit, he has skin in the game for you not to
Big Red poor comment honestly
@@DanielIles There is nothing knowledgeable about telling people to stop spending and dump all their money into paying off debt.
Just like Gary V. Their is nothing knowledgeable about telling people to work nonstop.
Dave, at least you should make it clear to your audience that your reasoning not to recommend filing bankruptcy is dependent on each individual situation. I clearly understood your explanation. How about if an individual owing $25,000 credit card, $50,000 car loan and works par time and with no assurance when he/she will find good paying full time job? And the wage he/she earn on his/her part time is barely cover his/her expenses, not much left for other bills?
Dave used bankruptcy to achieve the success he has today. He also has a business that competes with bankruptcy, so he has a vested interest in you not filing and buying his system.
Not sure why he mentions what bankruptcy does not stop, since that's not what it's for.
I love to hear you advice on my current situation Dave. Maybe you can help point me in the right direction.
50 grand in credit cards. absolutely filing bankruptcy was the best thing we ever did. kept our house and cars.
All of my debt is credit cards 😤 except my house and car. About the same 50k as you, how did you do this and keep your house and car?
Jessica Taylor consult an attorney in your state they can help you
Hey samehere
We reaffirmed one car out of 2 and we didn’t own a home when we filed. We bankrupted like $70,000 in debt. Best choice we ever made.
Exactly if you have extreme credit card debt just file. More than likely you will free up enough money to then be able to afford everything else without struggling
I went through a 5 year chapter 13. We are one of the rare few who actually received a discharge. It gained us absolutely nothing. We only had $1,300 in unsecured debt, the rest was secured. We got some really bad advice to file. After attorney fees, trustee fees and court fees it actually cost us more to file. During that 5 years I hated life. It’s truly a miracle my husband and I didn’t get a divorce. I wouldn’t recommend it to anyone.
Chapter 13 is not advisable but Chapter 7 is completely different. Most people wipe out all of their debts and they get a fresh start.
Going through it is hard but after all debt is wiped out they feel in heaven! And if they are smart in 2 or 3 years after bk their Fico credit score is up in the high 600s or low 700s. Some people even get pre approved invitations for credit cards just one year after chapter 7 bks.
Ch 13 worked for us because we owed arrears on our home and money to the irs.
@@wlonsdale1 had almost the same problem I owed Arrears on the house and a car payment i could not afford. Us bank would not talk to me about geting caught up. the 13 save my life.
You didn't do it right.
@@wlonsdale1
I thought you couldn’t discharge taxes ?
Because its immoral to borrow money, spend it, and not pay it back, obviously.
Matt It is. There are people who take advantage of this which is basically stealing.
You have no idea what people go through that cause this. It's not a call you can make
thats what your president did and he's president and immoral, its the American way.
I went through a divorce, got sick, lost my job. I had the means to pay what I owed when I borrowed it. I probably could have payed off that original debt without all the late fees. I was forced into Chapter 7. Ten years later I have a FICO of 814, my house and cars are paid for. I have a 0% loan, balance of $1300. No other debt.
I'm not an irresponsible bum. I'm an example of why we have bankruptcy laws.
Who cares about morals when you’re broke
I got an ad about the benefits of bankruptcy before this video.
Could he be against it cause of an alterior motive? Working more isn't an option for some. Heck, with the price of daycare alone, a stay at home mom is a better option than both going to work and paying for daycare or aftercare.
I dont even like spending money I dont have, debt is something i will not have aside from a mortgage
What if all my debt are unsecured debt? I’ve got like 38k of unsecured debts and no assets, very low income. pretty much nothing to lose right?
They can garnish your wages and sue you.
@@awesomegirl97 not if you file for bankruptcy.
i was in a very similar situation as you a few years ago and i just declared chapter 7 bankruptcy and had all of my unsecured debts discharged. it takes at least 3 months but it's worth it.
Dave preaches to lowest common denominator. You can play bankruptcy smart just like Divorce . Longer you wait the worse it gets . Play smart , don’t wait to long and bankruptcy can just be good business .
I’m one year in and it has changed my life! Only regret is i shouldn’t have waited so long by over thinking
Divorce and bankruptcy are not the same. Divorce is MUCH worse. Bankruptcy is not as traumatic as Dave claims. It’s a way to get a fresh start… IMHO
Thanks Dave for another super message. I feel as if you owe the money one way or another. I would hate to think I couldn't pay off my debtors. II would rather work until I drop dead trying to pay people back. One of the reasons I started by YT channel to document my journey!
You would rather work to death paying these predatory debtors than get a clean slate and start over?
@@MrRANDUM145 it's a spam comment, meant to brainwash readers into thinking you have to repay your debt.
I owe more than 145k in unsecured debt i have a decent income just made stupid decisions what should i file.
What is your income? If it’s above the median income you can only get a chapter 13
The part that Dave did not mention in Chapter 13 is the fact that after 60 months of payments the remainder gets wiped out
Clamp-On Multimeter Channel depends on the state you live in of course
...yeah that's what bankruptcy means, your debts are wiped out after you go through with it
@@trolli1266 ch 13 is Federal
Because he’s a liar.
it does not wipe out the mortage but your mortage will be current when you get out
I'm disturbed by some of the attitude in this section. How is going through bankruptcy yourself and then recommending against it a bad thing? I mean for the people who say, "Dave doesn't know what he's talking about" "Dave dosn't understand his audience" " if dave talked about it on the show advertisers would pull out -- it's all about making money" I don't 100% agree with everything Dave says (that's true of everyone with me), but if someone actually went through something and then advises against it...doesn't that point hold more merit?
He is stating that so you won't have to go through that not condemn you for doing it. He is also trying to help people from repeating bad decisions and not enabling them to be irresponsible.
Don't allow pain to distract from growth and everyone's finances are different.
Daughter of the King you're correct! I have a cousin who filed and it was the best move she ever made. I guess it depends on what state you're in. She live in Texas
She kept her home, cars and furniture with chapter 7...
I think I agree with your statement. Reverse 30 yrs.... I bet Dave with his mindset of today, would still file for BK again.... BK works.... just have to wise up and not make same mistakes over again.....
@@iceman2921 Hopefully people would wise up. But there have been callers who call when they are on their second bankruptcy.
My problem is not being able to rent because I have an open chapter 13… I feel discriminated penalized/for a decision I made.
So bankruptcy will not resolve student loans, mortgage, child support and IRS dept.
Please explain to a non- American: how does the personal bankruptcy work? What are the consequences??
All of your unsecured debts are wiped out in a chapter 7. You get to keep a certain amount of personal property to start over with, It varies by state. Any property that you have that is in excess of your protected property (called exempt property) must be turned over to the trustee or bought back from him. Any money the trustee gets gets distributed to creditors on a pro-rata basis, less his fees. Most people do not have to pay anything. Federal rules provide that people with a household income above the median income for their state for their family size have to pay their monthly disposable income (determined by a formula) to their creditors for 5 years. There is also a voluntary reorganization bankruptcy to do things like save your house if its in foreclosure where the missed payments are amortized over a 3 to 5 year period.
But didnt he file. How can he say certain things 🤦🏾♀️ if it works for you do it and dont let anyone judge you for it
Its uncomfortable to say but declaring bankruptcy is such a cringe thing to do. You let down so many people its pathetic.
I’m currently in a chapter 13 bankruptcy and 85% of the creditors failed to file a proof of claim. I was told that a voluntary dismissal may be the best option and to just pay off the debt that’s left. Anyone have any insight on this?
Yes, sometimes creditors fail to claim or just dismiss it and you have to make payments only on those creditors who filed claims on your chapter 13. The creditors that fail to file cannot come after you later on.
Just don't buy stupid stuff that you cannot pay for.Don't loan any money for anything unless you're absolutely sure that you can pay it back. It's not that hard....
People file bankruptcy for many reasons.
Try having a baby with medical issues that gets RSV , Croup, Influenza, and Jaundice, all in a span of 18 months. Has to be hospitalized at a children’s hospital. The medical debt is insane. Even with ‘good’ insurance. It’s not the family’s fault, they didn’t do anything wrong.
Considered bankruptcy a few years back, I’m glad I didn’t, almost back on top where I need to be!
Amen!
Nothing wrong with filing bankruptcy when needed. It is your right!
Well said agreed
@M Detlef what do you mean ?
@M Detlef sometimes people go through stuff that prevents them to continue to pay their debt. Specially with crazy interests and fees.
@M Detlef true but like I said things happened and people can't pay
Agreed!
Talking my family into sitting with me and building a budget for the next few months
I’m betting much of chapter 7 no assets filings are related to predatory credit card (unsecured) debt. Many of these credit cards are cost in states that don’t have usury laws.
One could argue that an individual should not take out such credit cards. My reply is water over the bridge and bankruptcy is a great way to get these predators to go away.
Married a man who was paying back a bankruptcy belive me we are still paying on a house the bank should have took it sucks
It sucks that the bank didn't take the house?
I really want to do a Chapter 7 bankruptcy as long as it works out the way that I think it will. I make a little over $750 a month on SSI which is basically disability which according to my research is exempt. I have no house I have no car I have no boat as he mentions I have no property of any kind other than VHS DVD/book sets that and the VCR/DVD player are the only property that I own. I am a single guy that does not have a family and does not expect to have a family within the next seven years. I do not plan on buying a house because there’s no way I could afford a house. As far as my debt I have about $30,000 on credit cards which again according to my research gets wiped out no problem and I have no assets
Look up judgement proof
I’m a bankruptcy paralegal, and you should talk to an attorney. I also agree with looking up the judgement proof comment above.
@@meaganmccullah8882 I did talk to a couple nobody wanted to take it because I have nothing to protect and they told me my SSI is protected so it wasn’t worth their time. They are trying to help people who are at risk for losing their property. And told me to tell them they can go pound sand
But does it mean a bank will not loan you money again in the future if you file for bankruptcy?
@@meaganmccullah8882 since somebody just recently commented on this, bringing it back to the top and making me notice it, I just saw your comment. I did try talking to multiple attorneys at the time that I posted this and no lawyer would take my case stating it wasn’t worth their time because I had nothing to try to protect. So there’s no reason to waste a lawyers time if the creditors can’t get anything out of it. So after two years, one of my creditors has finally taking me to court I showed up for the virtual court case told the judge everything I have told the creditors since day one, including what the lawyers told me and she says she understands the situation but that’s not an excuse for not paying back the debt and so she did issue the judgment and they have every right to try to get the money. But again my question is is the only income I have, and will have for the foreseeable future, they do know they’re just wasting their time right? You can’t squeeze money out of a rock. I would love to file bankruptcy and be done with this foolishness, but no lawyer wants to waste the time and so now I’ll just be ignoring phone calls for the next who knows how many years 😂
It was a great decision for me. Nothing devastating about getting it whipped clear!!
it's never too much until it is.
It's not true. Bankruptcy is not devastating for most people. If bankruptcy was that devastating, hardly anyone would file a petition to declare bankruptcy.
Although bankruptcy can be a lifesaver, it stays on your credit history for 7 years, which could cause many more issues down the road.
Definitely depends on the situation!
Investing Engineered it really only affects it for 2 years though.
Investing Engineered I thought it was 10 years.
It's only 2 years after your fixed for bankruptcy. The day starts the day you actually file. Most end up in bankruptcy for five years just wait two more years and everything will go back to normal
Chapter 7 is 10 years
Chapter 13 is 7 years.
Yes you can borrow money after bankruptcy but it will cost you.
That’s only if you don’t get a lawyer who can remove it. I know 4 people right now who had it removed after their discharge and were able to buy homes cars etc for low interest rates after about 6 months
I filed bankruptcy because my sister in law stold my identity and bought a house then they would not take it off my credit I have also lost my job so afterwards still had student loans to pay off
Dont blame him one bit even though some callers really have no chance other than giving up. Their fault or not I wouldn't tell anyone when to throw THEIR towel in.
Bankruptcy is not throwing in the towel. It's a financial tool that is used after careful analysis.
@@ariefraiser140 It is not. It is a form of laziness.
@@EmilyGloeggler7984 Lol....Ok Emily
@@EmilyGloeggler7984you homeless, nobody cares about your advice 😂😂
Funny thing is, people are complaining that chapter 13 made them pay more or took thier tax return, etc. But ive yet to see one person actually own up to the debts. Its your debt so you should have to pay it. Chapter 13 is a plan and an interest free one at that, so its a better option than paying years of interest, etc. It also forces you to stay on track. If youre lucky enough to be able to do a 100% plan, then they really won't even bother you.
Bankruptcy is not an easy way out. Pay ur debts off
It sure is.
Try getting Sick. !
Bankruptcy is easy and you will recover fast. Dave became self righteous after he did it.
Exactly, that’s why I don’t like him.
Marriage is a Life detrimental decision.
Declaring bankruptcy was one of the best things I’ve ever done.
Me too!
Amen!
same here.
I agree with you. Everyone's situation is different. Things happen: lost of job, medical bills,identity theft, family deaths,etc. Should I have to work 3 jobs for 10 or 20yrs to try to pay off bills? What about food,electricity,rent,etc.,what happens to those bills. Should I live in the streets & drink water from fire hydrants & look for food in dumpsters while working those 3 jobs?? For people facing these issues, bankruptcy is the only solution...
Have you purchased a house afterwards?
Dave. I have done both. I filed for divorce for taking my money and assets. And laughing at me because her boyfriend was a better lover. And I filed for bankruptcy with chapter 7. I had zero assets after that divorce and up to my butt in debt because I put her on my charge cards. So I had nothing to lose by doing so. Ten years of bad history but I was free in year 11. Now considered upper income by Pew Research. I can clearly say to any man reading this, divorce that Karen now and declare Chapter 7 bankruptcy if you need to. Divorce is super and so is bankruptcy. Unless you want to be a forever slave to some Karen and the debt holders. NEVER DELAY DIVORCE OR BANKRUPTCY.
My fiance has filed for bankruptcy twice in his life. Now he is in debt again and his credit cards are maxed out. Has he learnt. Nope! I don't think any one learns life financial lessons from being rescued.
That's not true. I know a few people including my best friend who filed bankruptcy and never ever again incurred in credit card debt. Don't generalize. Even Dave is an example!
Bankruptcy does not do away with child support!! He is smart!
A federal lawsuit will take care of that.
If you think about it, a lot of the time, divorce is an act of hope. An unhappy, broken marriage that leads UP to a divorce is the 'hell' part...the divorce means that they're changing their behavior and moving on with their lives because they've acknowledged that what they were doing wasn't working. I'm not suggesting that it should be the first thing you try. Of course, you should do counseling and try to fix it...but if you can't, staying together for another 30-50 years makes no sense.
Would Dave be a millionaire if he did not declare bankruptcy?
What if someone decides to strategically accrue very specific types of debts (like credit card debts), with the specific aim to file for bankruptcy. This way, you can say live for a specific period of time, like go on a few vacations, and then just file for bankruptcy to remove the debts. So, the person is not taking stupid debts like a car loan, and he/she is making minimum payments while borrowing hundreds of thousands of dollars in debt. What is wrong with that?
I know that doing this is morally wrong, and I would never do it. I just want to know what negative a person doing this would face. I just want to know why the option of bankruptcy should even exist. It just seems like a "get out of jail free" card that can be abused.
Pra Baj The bankruptcy courts are there to help people try to get back on track. It is there to save marriages and lives. Isn’t it nice for a change there is a court system that isn’t out there to give retribution as its sole means.
Also aren’t the banks kinda in the same. I remember 10 years ago banks made a lot of bad decisions then went to the government asking for bailouts for their own bad decisions. It goes both ways too.
I think it would be hard to get hundreds of thousands in unsecured debts. That person probably has high income and a good credit score. So when that person files for bankruptcy, they damage their credit score PLUS they probably have to make a monthly minimum based on their income. Over the course of 5 years, idk if it is even worth it.
Fraud
U think i can file for chapter 7 in over 20k debt make 2.5k-3.2k a month tho but have bills
Sometimes you do what you have to . & what’s best for you. Sometimes bankruptcy maybe a person’s only out . Everything else didn’t work out or what ever the case maybe.
Dave, I have been a single parent of three the last five years and my credit report shows I had lost a house and went to an apartment temporarily where I gave a 30 day notice and they unethically on my report put that I did not enter and now that is derogatory and makes it hard for me to rent away from that my salaries been way too low and yes sadly I have three car loans Long story there but I do have two teenagers that drive one will be driving soon and we’re coordinating who’s gonna take on what but in the meantime, I do have about 6000 in credit card debt and then just a couple personal loans of 1000 but my salary is just not where it needs to be but it could possibly change and be back to what it should be. I’m only a month behind on a couple cars if that How do I get this derogatory Apartmentt off of my credit report so that it’s not hard for me to rent as I’m having to move out of the house. I am on the title for long story there as well and it’s hard to get approved because of that I was thinking of filing bankruptcy just so that would be cleared off my report the derogatory Apartmentt report they’re saying I owe $4000 because of moving out early I appreciate your guidance and help so much because I would love to not file bankruptcy, but my expenses are around 6500 with the cars and rent that I will be having of 1800 starting February and other expenses and credit cards I only bring in 55,000 right now it will hopefully change. Thank you so much. Look forward to your help.
How do I contact to ask a question. I've been considering bankruptcy and only have credit card and loan (not student) debt and I have then already approved too try to garnish wages but I lost my job and have no wages
as long as you dont have a job there is no m0ney to get. if they want to get mean and nasty they can go back to court and start taking tV and other things you might have that is worth money. 90% of the time they dont
The whole point is to get a reset because you screwed up and got in over your head.The reason it exists is for you to learn from it.
You just caused a thousand heart attacks! Good job~
If I ever had to go through bankruptcy I believe that would seriously make me emotionally & mentally unstable within society since I fear debt itself.
I am a retired person. My financial institution told me that my CD can be withdrawn without penalty by a certain date. What is the best action to take on a CD?
Never get a CD. They are money makers for the bank, not you.
Unless your CD is way over market on the interest rate (4% APY or higher), you are better off keeping it in a Money Market account that is FDIC insured. But really, if you don't need the liquidity and already have an emergency fund then use that money to invest in something like a good mutual fund or property.