Bad Debt – How To Get Out of Debt & Get Debt Free

Got bad debt? We can help! Here’s how to get out of debt. Get debt free starting today! In today’s episode, we go over where to start and real steps you can take.
Let me know what your struggle with debt is, in the comments section below.

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Welcome to Oregon Cash Flow Pro, where our goal is to help you take control of your finances, maximize your cash flow, and reach financial freedom.
In today’s episode, we’re going to talk about how to pay off bad debt. But first I want to start with a brief story about one of our viewers, who I was able to help over the course of this last month.
So, the situation was, our viewer had maxed out credit cards, with high interest debt, and also student loan debt at 9 & 10% interest.
They’re currently going to school and were struggling with keeping up with making the minimum payments on the credit cards and also knowing that they were continuing to keep falling further and further behind, simply due to all the interest charges.
So, what we were able to do: Their credit score was in the low 600’s and the opportunity for them to refinance out of that debt was very slim.
So, here’s the plan that we came up with and we were able to accomplish. The plan was, consolidate that high interest credit card debt with a private lender. Get those high balances off their credit report, so their credit score goes up, and then transfer that consolidated debt back onto a 0% interest credit card. Which they can then work on paying 100% principal on paying down that debt.
And if needed to, after the term of that 0%, try and get them another 0% term, if they haven’t paid it off. So that they can continue to work on it, without paying any interest charges.
To reiterate, the case is they’re currently paying 26 or 27% interest on their maxed out credit cards. What we ended up doing was consolidating all of those credit card bills, about $8k worth, into a loan from a private lender, which does not report to the credit bureaus. So it looks like they wiped out all of their credit card debt.
What that did was, their credit score shot up 150 points within 30 days. Shot up 150 points. They were able to qualify for 5.25% interest student loans for this coming year, instead of the 10% that they were getting.
They were also able to qualify for a 0% interest for 21 months credit card. With a balance that allowed them to transfer all of the consolidated debt onto that 0%.
It was a massive success and they were thrilled with that. I thought I should share that with you guys. Those are the types of things we’re trying to do here at this channel.
Move people from really high interest debt, transfer it to a private lender at a medium interest debt, and then transfer that as soon as possible into a 0% interest situation. So that they are now paying nearly all of their money towards principle and not giving any of it away to lenders.
Stick around, we’re going to talk about how to pay off that high interest credit card debt. And certainly the case of our story at the beginning of this video is one way to do that. But we’re going to go over a lot more in detail, right after this.
Oregon Cash Flow Pro offers free money management advice to help you take control of your finances.
And now here’s your host. Personal finance enthusiast and licensed insurance broker, James Barber.
Before we get started, be sure to hit the subscribe button, along with the notification bell, so you can be notified of upcoming videos. Now, let’s get into it.
Now, I want you to think about the worst debt that you could have. When I think about the worst debt, I think of high interest credit cards and payday loans. Short term loans with massive charges that lead to extraordinarily high annual percentage interest charges.
Those payday loans can run you 300 or 400% on an annual percentage rate basis. It’s so hard to get out from under that kind of debt. And we often just get so focused on keeping our heads above water, that we don’t even stop to consider how we got in this situation to begin with and what we can do to ultimately get out of it.
And we may even find ourselves in a position where we don’t even believe that it’s possible.
I want to remind you that it is possible! And you owe it to yourself and your family to make it happen. These two types of really bad debt is what our focus is going to be on today.
First, we need to identify how you got into this situation. Perhaps you just encountered an emergency expense that snowballed. Could have been a hospital bill, an injury, or an illness.
Or, maybe you can’t control your spending. The lure of credit cards is just too much. It’s too enticing.
It’s really important to look within yourself and figure out what your weaknesses are, so we can figure out the right path to get you out of debt for good.
So, if your circumstances are the result of some type of emergency expense, and you don’t have a problem with over spending, then measured uses of credit cards can be really helpful in this effort.
If you do have a spending problem, then I want you to consider avoiding credit cards as the solution, or at least severely limiting their use until you can change your spending habits.
Changing habits is possible, but it is not easy.
So, regardless of what got you here, I think the first step is to start decluttering. We need to start paying down this debt as quickly as possible to get it under control. It’s time to go through each room of your house and figure out what you have to have and what you can get rid of.
Have a garage sale. Put items up on Craigslist, Let Go, or Facebook. Whatever you have to do to make some money off of it.
If you don’t need it in the next year or two, get rid of it! This is one of the hardest things to do. I should know, it’s one of the things that I have the biggest challenge with.
In my mind, I think, I might need that in a couple of years and I don’t want to have to go buy it again. And so I just hang onto it and it takes up space. It doesn’t do ME any good, especially if I’m paying interest to somebody for another debt. If you have those same thoughts, consider this. In a couple of years, if you need it again, I mean it might be 5 years, there’s going to be better products out there. They’ll likely be cheaper and they’ll likely do a heckuvalot more and they may even do the job better.
In addition to that, you’re going to be in a better financial situation to be able to buy it again if needed. So, start decluttering!
Another option is to consider ways to bring in more income. You can ask for a raise. You can work more hours. Or you can start a side hustle.
I’ll be doing a video on side hustles soon, keep an eye out for it. Just know that there’s a lot of options out there, and one of those may work great for you.
Now, when you start paying down debt, you’ve gotta figure out what method you’re going to be using. There’s a few methods that are very effective. We’ve got the snowball method, the avalanche method, the cash flow method, and the cash bank method.
The snowball method means you take the lowest balance debt first and you put all of your extra income towards that and wipe it out.
At that point, the extra cash flow that generates from wiping out that debt, combines with everything you had extra and you apply it toward your next lowest balance debt.
This in effect, creates a snowball that grows bigger and bigger with each debt that you pay off. The advantage to the snowball method, is that you get these quick wins very early, that motivate you to keep paying off debt and it also ends up freeing up cash flow in short order.
The avalanche method takes the highest interest debt first, pays that off. And then similar to the snowball method, you start applying your extra cash flow to the next highest interest debt, and the next one, and that’s going to keep getting bigger. This is the Avalanche.
It’s the most efficient method and it results in the lowest amount of interest charges. Ultimately the quickest way to pay down your debt.
The only down side to it, in relation to the snow ball method. It may not give you those quick wins right at the beginning. And so you may not get that motivational hit to keep you going. So , it’s something to consider.
A lot of what’s going to determine what’s best for you is your financial behaviors.
The cash flow method, you score each debt by dividing the monthly payment by the balance. After you do that to each of your debts, the lower the number, the least efficient that debt is.
So, you pay off the debts with the lowest numbers first, in order to free up the most cash flow. This method ignores interest rates and just focuses on increasing cash flow.
It’s a great way to identify ways to free up cash flow quickly, so that you stop digging into that debt hole.
The cash bank method is actually not something I’m going to get into on this video because there’s a lot more to it. It will have it’s own video. But, essentially you’re going to utilize infinite banking and dynamic banking in order to maximize paying off your debts, but also increasing your wealth at the same time.
So, you want to figure out what method is going to work best for your situation. Write down a plan that you can refer to regularly. Then start attacking that debt as you declutter your house.
Next, let’s take a look at your credit score. Take a moment and go watch this video on how to maximize your credit score.
Using those tips and guidelines, I want you to make a plan to get your credit score up. Especially identifying any derogatory marks on your credit report and get those corrected. As you start to pay down this debt, we want your credit score to go way up. As soon as your score allows, we will go after those special rates, like the 0% interest for 12 months, or 15 months, or 21 months.
By balance transferring from high interest credit card debt or payday loans, to low interest or 0%, you could end up saving hundreds of dollars a month on interest charges that you can apply right to principle and really focus on wiping out that debt, quickly.
Now, if you can’t yet qualify for those special rate credit cards, then you can look at doing a consolidation loan.
This can be helpful to reduce your monthly bills and also will help your credit score jump, so that you can qualify for those special rates.
Continue to refer to and update your debt plan as you go. If you want some help or guidance with this, click this link, and you can sign up here for a 20 minute phone call with me, and I’d be glad to help point you in the right direction.
Now, if you have any questions or comments, be sure to leave them in the comment section below and I will engage with you there as well.
Thank you for watching!

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