The Ramsey Show - App - Dealing With an Upside Down Car Loan (Hour 1)

Episode Date: March 20, 2024

🎵 Live from the headquarters of Ramsey Solutions, it's the Ramsey Show, where we help people with their money, their work, and their relationships. Whether it's friends, romantic, whatever you got going on in your life, we are here to help. I'm John Deloney, joined by my great friend, Rachel Cruz, and we're here to take your calls on just about anything. 888-825-5225.

888-825-5225. Let's go out to Johnny Five in Phoenix, Arizona. Hey, Johnny, what's up? How are you doing today? I'm good, man. How about you? Not too bad. Out Johnny, what's up? How are you doing today? I'm good, man. How about you? Not too bad. Outstanding.

What's up? All right. So I'm going through the baby steps, and I'm looking to maybe kind of work them around. Basically, my income is about $82,000, $82,000, and I just paid off about $25,000 worth of personal debt and it freed up about $3,700 a month and I wanted to find out that I have about $16,000 with a credit card debt and I have it targeted to have those paid off

in about three to four months and it still leaves me with that 15% that I could apply to it. And I was wanting to find out, one, is it okay to invest that? Or should I take that $1,242 and still attack credit cards? Or could I turn around and still start the investing as I'm attacking the credit card debt? How old are you, Johnny? I'm 47. And that's, I think that's the call to action. Well, yeah. Well, I was just curious, yeah, where you were, because here's the deal. I mean, how much, how much interest are you paying on those credit cards? Combined, I mean, it kind of varies and stuff, but half of them,

there's probably about 10 of them that I have. And the most expensive or the most debt that I have on one of them, I think it's like $3,500. No, but what's the interest you're paying? Yeah, what are you paying on those? You know what? I really haven't calculated it, but if I had to guess, the average ones are probably close to 18, 19 percent. 20 percent. Yeah, that's what I was probably going to guess. Because here's the deal. The baby steps are in order for a reason and you're going to have opportunity costs on either side, but you're going to come out better when you eliminate debts. You're not paying that extra interest of 20, some of the credit cards up

to 22%. I mean, it's wild, the interest rate right now. And so what you're doing is you're eliminating that, not just the fact that it's debt and it's risk, but also from the mathematical standpoint, so much interest that's paying out versus, you know, and then once you pay all of that, then to press play and go and invest. And then, you know, on average, 10, 11% that you'll gain, but you'll be able to invest more and more consistently without having these credit cards. So without a shadow of a doubt, Johnny, even with your age, it is still the answer of yes, take that extra cash, pay it off quickly and, and stop. Yeah. Playing the credit card game. I mean, have you, have you eliminated and cut up

and gotten rid of the 10 credit cards? Yeah, essentially, I committed plastic surgery. Good, yes, yes. Yeah, that's awesome. And again, I know it can feel unnerving not to be saving for your future and having retirement there, but here's the deal. You're gonna be able to knock these credit cards out

so quickly, like with your income and everything. And like you said, like the biggest one's like $3,500 or whatever it is. So it's like being able just to have that motivation and paying off those smallest ones and getting them out. And then that frees up so much just space financially with margin, but also space emotionally just to know that you don't have that risk. I want that to haunt you, that you're 47 and you're not putting money into retirement because you're still cleaning up old mess. Let that be the jet fuel that gets that nonsense out of your life quick. 100%, yeah.

You know, and that's what I've done. I've already paid off like two of them. And, you know, I know that they compile interest interest and so I'm trying to compile my payments. So I took the smallest one, um, or essentially the smallest two paid them off. And then I'm just attacking them. I actually have them labeled, uh, one through 12 or one through 10, whatever they are. And so, and I just plan on doing it. And then every time that I pay something off, you know, if it was a $100 that I paid towards that card that I paid off, I would put it towards the next one up. And so I've been compiling the payments in that aspect.

I'm still sitting here looking at this extra money, and I'm like, gosh, why can't I just go ahead and start investing it? What's your next biggest credit card that you have to pay off? Next one is going to be $22.95. Pay it off right now. Right now. Okay. By the end of this show,

you should have that one knocked out because you got $30, what, $500 burning a hole in your pocket. Pay that next debt off. Now you've just knocked one out. Now you only have a few. You have nine left, right? You should keep knocking them out.

Right. Get them done, man. Okay. For sure, for sure. And then, you know, I've got two houses right now. My one house has paid off that I live in. And then I have a rental that actually brings in some passive income. Um, and so you're passively going broke to sell that house. Can you afford it? Um, Oh yeah. Hands down. The payment's like 450 bucks a month i bought it um as a foreclosure and then um and i paid like 45 000 for it it's a stick built on a little lot

in a rural area and it it's it's had uh i've had renters in it for five years now six years and how much total debt do you have johnny not including that heck that extra house not including the house um i paid i drove a well and i got some personal loans and i got those paid off in fact i just paid off six thousand yesterday good um my monthly bills um no no not monthly bills yeah just in general and all of it is it just the credit cards left was it sixteen thousand you said yeah that's it and that's it okay and then the 4500 a month is what my um all my bills are my electric all that okay and um and any savings yeah about 15 15 000 in savings yeah okay it could be more but i would no johnny johnny i mean honestly what i would do is um because with the baby steps, again, it's you have

a thousand dollar emergency fund and then you take everything else. So honestly, Johnny, you could be almost debt free by the end of today. And that's what I would do. I would go down to a thousand dollars, pay everything off, and then start saving that back up. And then that changes. It's out of order. I feel like what you're doing.

You're all over the place. Everything all at once. So yeah. you kind of shuffle in a little bit yeah but you have great progress because i'm like you you have you're making great money you know you're able you're you're motivated to do stuff which is great i just think just tilting that motivation and going in one direction versus trying to do 18 different things is going to help you see more progress and feel more secure so if you hold to do 18 different things is going to help you see more progress and feel more secure. So if you hold on the line, Austin's going to pick up and we'll throw in a copy of Total Money Makeover, which is Dave's bestselling book. But it walks you through very simply the baby steps. I mean, you could read it in one night. But honestly, Johnny, just do these things in order. And you have the motivation and you have the cash coming

in. It's there. It's all there. The pieces are just doing them together by getting out of debt, building up an emergency fund, then investing in retirement. Do it in that order. And you're going to do great. You're going to do awesome. And pay that house off soon. You know, $45,000 for a house is great. Well, yeah. And then you've got two paid for houses.

Yeah. One that you're renting. You're going to be doing great. So just do them in a correct order. Honestly, Johnny, since the house is only that much, I would just almost throw it into the dead snowball. I would. That's like what people pay for a car.

Exactly. They pay more than that. And I think it's important to call out, you mentioned One Direction. That's George Campbell's favorite band. It's amazing. Hey, 888-825-5225. Give us a shout. We'll be right back.

Welcome back. This is The Ramsey Show. I'm John Deloney, joined by Rachel Cruz, taking your calls, 888-825-5225. Today's question comes from Ella in Nevada. Ella writes, My partner and I used a lot of your advice in our day-to-day lives, I desperately need your advice. He's 22, I'm 21 and currently pregnant. We're both in college and still financially dependent on our parents but want to become independent to support our new family. Problem is, partner says he does not want to get married until sometime after we move in together

and the baby's born. I don't want to get married just because we're having a child, but we've been dating for three years and have had this conversation before. I don't understand why there's so much pushback now. And when it's more important now than ever that we get married, he claims that finances and the timing do not work out, but he knows I don't want an expensive ring or wedding. I only want to make it official. Why is he holding back? And is it time for me to draw a firm line saying i will not

play house with him whoa what do you think what i was gonna say dr john deloney what do you think i mean it's like the uh i've been learning i don't know why i'm probably to the game attachment styles he sounds like a voidant yeah oh big time yeah um it sounds man there's so much here i mean he's 22 yeah this is pregnant you're in college he may not have any money and he feels like i can't and now and to be responsible for a child and a wife probably feels like a lot of pressure for him right no question about it and i will say this as a guy who did, my first kid was in my late, late 20s. Like we waited a long time. I did not fully understand the responsibility of what was coming our way when my wife got pregnant.

She understood that immediately. And it took me, I had to learn, right? And that's not an excuse, but I didn't fully understand what was happening or how much our life was gonna change. And so there is that. The other side of it is, y'all are 21 and 22

and now y'all just got thrown into grownup land. Yeah. Right? Real, real fast. I'm just going to be honest. He may not want to marry you and he may not have been planning on marrying you. And you say, we've been together three years. That doesn't matter. It might've been a college

romance for him. And then he's going to move on with his life. And so all that to say is, I don't think y'all you're talking about rings or weddings. I think y'all are on way different pages. I would recommend y'all go sit down with a, a relationship counselor, even a marriage counselor, have the conversation about how you're going to co-parent and start from there. Yeah, because Ella, I mean, only what you can control is you in the situation. And so I would be talking to your parents and saying, hey, once this baby comes, because I mean, they're still being financially supported by parents.

Am I off the payroll? Are you going to still be with, you know, how can I create a life for me and my baby? And then you have to decide, is he going to be a part of it still or is this a deal breaker for her to say like if he's not going to commit to this i'm out right so and she doesn't nobody well let me say it like this i've had this conversation i can't even tell you how many times with college students and their parents. And some parents would say, you went and did this, you're out of our life,

which I think is a terrible choice. It's a terrible decision. I've never seen parents not regret that move. The other one was, I don't want to keep paying for tuition, but I also know now my daughter's going to be a single mom dropping out of college as a senior. I understand the statistics tell me what trajectory that's on. All right. So I'm going to pay for an apartment and I'm going to pay for college to get her out of. So y'all sit down and have that conversation. You just have to create your life.

And which means Ella, you've got to move forward as though you're a single mom of a new baby and with a boyfriend. And that's the plan you have to make for housing for child care and that means you have to sit down with your parents as much as you want him to be involved he's telling you i'm not going to be involved and that's heartbreaking that's sad it's whatever but like rachel said you got to deal with reality on this one yuck yuck yuck yuck yuck and by the way for all those out there rachel talk to people who well, I don't want to get married yet because of our finances. Yeah, I would never stop a life choice

like getting married, even having a baby, of waiting on the finances to be in a good spot. Because the truth is that finish line can keep moving. It will. And can it be less stressful if you have money saved and all the things and then you have a baby?

Sure. But also, I don't want you waiting until, oh, I get out of debt and we this, this, and this, to start your family. I'm like, your family's like number one, right? Like there's a priority level in the sense of, if there's something in your life, a change, like marriage or a baby, just do it, do it.

And then you can figure out the money piece. But again- You can do it together. Yes, that's the other thing. And there's this big cultural lie that I've got to be perfect and then they've got to be perfect. And then we come together. Yes, that's the other thing. And there's this big cultural lie that I've got to be perfect, and then they've got to be perfect, and then we come together. It's nonsense.

You'll never be fully you in isolation like that. So, man, get married. Go do your thing. Yeah, the ring and the expensive wedding is kind of off the table right now. Y'all are two college kids that are having a baby. So if you're going to do it, let's just do it, and we'll do the other stuff later. But, yeah, it's time for you to, A, draw firm lines, and, B, you've got to start getting your life in order because you've got a baby. So if you're going to do it, let's just do it and we'll do the other stuff later. But yeah, it's time for you to A, draw firm lines and B, you've got to start getting your life in

order because you got a baby coming, whether this deadbeat is going to be in the life of you two or not. And yeah, there we go. We'll go out to Tampa and talk to Beth. Hey Beth, what's up? Hi. So I have a question. I am following the baby steps currently in baby step two, trying really hard to get the rest of my debt paid off. Most of the debt I have left is in my car. So I am looking to get rid of it and get something that costs a lot less so I can get out of debt faster. But I am upside down on the car loan. So I'm not sure like the best way to go about getting rid of this. Sure. How much how much do you owe on it? How much is left on it? I owe about $18,400. Okay. And how much is it worth? I was just at the dealership the other

day and talked to them. They said they would probably only take like $9,000 or $10,000 for it. Okay. And dealership is the more expensive route, or you're going to get less of the money for that car at a dealership because they have to do a markup because they have to turn around and sell it, inventory, all of that. So your best bet is through a private party. But how much do you make a year, Beth?

Just under $60,000. Okay. You know what, Beth? Keep the car. Keep the car. Pay it off. Yeah, and pay it off. You're fine. Because our rule of thumb is if you can't pay it off in 18 months or if it's more than half of your annual income, that's when you have way too much card and it's going to be hard to get traction and progress. But with these numbers, I mean, you'll be able to do it. Okay. I guess the other part of it, why I'm trying to get rid of it too, is because I actually have a Kia. I'm not sure if you know about the problems going on with them right now,

but I can't get it insured. And for me to be able to get an insured, it's like way out of my price range. It's a ridiculous amount of money to try to get it insured. I'm at the point where it's time to renew my policy and I really am having trouble like trying to afford the insurance on it. So that's the reason I was trying to get rid of it. Okay. Yeah. All insurance is,

is through the roof right now. So yeah, you do want an insurable car, but. What about, what about a Kia makes it uninsurable? I've never heard that. So they've been having a lot of issues lately.

There's certain models, and I think mine is one of them, that they were not made with some kind of like security system, like anti-theft, and they're really easy to steal. I did talk to like some insurance companies, and they did tell me like, yeah, my Kia is the problem. Like they're not insuring Kia's almost a lot of insurance companies. And did Kia not have a recall? And to fix it? i'm not sure yeah you can't have you can't have an uninsurable car yeah all cars have to be insured on the road so there's got to be some my goodness and it's and i think it's something and in a sense too though beth i think that i don't know you'll have to run up the numbers but taking an eight thousand dollar hit on a car

just because of insurance doesn't sound right. Doesn't sound worth it to me. So again, I would still shop around. And again, it's, I mean, all insurance is up right now. Like we're seeing that across the board in almost all states. It's a lot. And so, yeah, I would hate for you to take an $8,000 hit though on something that you're going to be able financially to pay off. But again, I don't know what the insurance is telling you. How much are you paying now and how much are they quoting you? Well, right now it's like almost $500 a month for just my one car and just me as a driver. And how much are they quoting you for the future? It's about the same.

It really hasn't not gone up too much, like maybe a little more, but it's just, it's hard because I had paid it in full before. So now that it's like time for a new, I can't afford to pay it in full again or like the monthly. So I didn't have the monthly insurance payment before. Call our friends at Zander and call a local, endorsed local provider in your area. I just got a message from my brother-in-law, a family member this morning that said he reached

out to a local ELP for the first time and they knocked $300 off. It's a great crew. Yeah. They shop all different companies, Beth. It's not just one specific. So yeah, check out zander.com through Ramsey. And a local, endorsed local provider. Thanks for the call, man. And we need to dig into this Kia game. All right, folks, a lot of you have questions about taxes. We get it. They're confusing. You don't like paying them. It's kind of like the government says, hey, we know how much money you owe us, but you figure it out and send us a check. And if you're wrong, then you have to go to jail. We know that it's the worst, right? And people say, here's a question from one of our listeners. We normally have someone do our taxes, but our accountant retired. I think we have a simple return. Should we try to file ourselves with

Ramsey SmartTax? You can for sure use a software like Ramsey Smart Tax if you feel confident filing on your own and your situation is relatively simple. We recommend working with a tax pro when you had a major life change, like somebody retired, you got a big inheritance, you adopted a child, or if you own a business, or if you're not confident about filing your own taxes, or if you just want to save time and stress and just outsource it to somebody else. If you're confident about filing your own taxes, head to ramseysolutions.com slash tax. You're going to have Ramsey Smart Tax with low upfront pricing, no hidden fees, no trying to sell you something on the back end so that we can all get richer. Everybody shakes hands on the front end of this deal. Or you can connect with a Ramsey-trusted tax pro. Again, all of that can be found at ramseysolutions.com slash tax. Let's go out to

the Utahs in Salt Lake City and talk to well, well, well, my Michelle. What's up, Michelle? Hello there. How you doing? I'm doing great, thanks. Excellent. What's up? So I have a question. My husband and I, we own two homes, and our primary home is paid off. It has about $550,000 in equity, and then we have an investment property that we owe about $90,000 on,

and that equity is around $700,000. We have both of these homes in an irrevocable trust, naming our daughter as a sole beneficiary. It was set up that way originally because my husband's son was not in our lives at the time, but he has since come into our lives. And my husband originally had approached me and said, hey, I want him included as a beneficiary. We need to change the irrevocable trust. I was in agreement that he should be a beneficiary sometime in the future when we demise. But recently he came to me and

said that he wants his son actually to be able to move here to Utah. And the only way for him to be able to afford to do that is if we give him the rental property. And so I'm not in agreement with that because I don't think it's wise from a financial standpoint for us. We don't have any other assets. We don't have any debt, but we also don't have any other assets. We don't have any debt, but we also don't have any other assets. So we're not in a position to really be just giving somebody a property outright. Yeah. How old is his son? His son is 40 years old. And why isn't his son able to afford to move where his son wants to move? they do have a home where they live where we live is very expensive the average home is between so he can't afford to live there he can't afford to live

there he can't afford to live here yes and and that's why my husband is like well he can't if we give him this house yeah yeah dude that doesn't sound like us that doesn't sound good and what about your daughter so and that's the other thing, too. She would be in agreement because she just wouldn't want to be confrontational. She'd be like, okay, that's fine if that's what you want to do. But, of course, she's going to be hurt if he's given a house that she originally thought she was going to have. With $700,000 of equity? I'd be pissed.

I'm sorry. What? Yes. equity i'd be pissed i'm sorry what yes well it sounds like we have a greenhouse on the property and my husband is wanting to create a csa in the future so his other thing was is he said oh you know he'll be here to carry on my name and keep my keep the green it sounds like your it sounds like a husband issue more than the son dude this is a hundred percent a husband issue here's what it sounds like sounds like he is trying to buy back lost years. And you can't do that. Yeah, that's my feeling too.

You can't do that. You're going to throw money into a fire pit and don't do it. Don't do it. He's going to compromise his relationship with his son. He's going to compromise his relationship with his wife and his daughter. It's just going to become a mess. If he wants to rent this house, if y'all want to rent this house to him, even at a discounted fine for a season. But it also sounds like if he's back in the picture, you fighting for, no, no, no, no, no. We have a will and it's only one kid. Well, if there's two kids in the picture,

then maybe y'all need to sit down and redo your will. But this whole thing is a much bigger conversation. Yeah, the will is one thing giving them just a house right now when he can't afford yeah that's just madness y'all can't afford it he can't afford it nobody can afford this right and he went in your husband wants to make up for lost time and be around a son i i totally understand that the problem is this gnarly ugly reality called math doesn't work't work. Because this is your retirement. Is that what you were saying? That you guys don't even have a lot like this is

it? Well, we're right. Our primary home is paid off and both homes have a lot of equity. We have some gold, some silver, a little bit of that, but yeah, we don't have anything else. When we retire, we'll depend on our social security. so i think that's why would he give away three quarters of a million dollars of your financial future because he's emotional to a 40 year old i think so i think he originally is like we probably aren't ever going to sell this property because we're going to put the the greenhouse on there we're going to have a csa but we don't know what the future brings we don't know if the csa will be successful we don't know what the future brings. We don't know if the CSA will be successful. We don't know if we'll ever need to live in that house and sell this house. There's a lot of unknowns. And I feel like... Is your husband a gardener?

Is he a gardener? No, he's not a gardener. He just recently decided that he, with the way things are in the world and food security... So awesome. I would get a third party involved, Michelle. I would sit down with a good therapist or a counselor, and you guys need to hash it out. Because again, when you get down to it, what John said, I'm like, it's not even like the house isn't the problem. It's everything underneath.

It's the motivation behind it that's unhealthy. Well, it's him watching a lot of YouTube, the way the world's going. We've got to start our garden up. Yeah. Hey, listen. It might be me. I know it's Rachel for sure. As a guy who lives on some acres outside of town and has gardens we've got enough produce we share with all

of our neighbors my wife's amazing yeah but even she after last year canning jarring we've got jars and cans everywhere our neighbors are gaining weight she said this year from the fruits and vegetables yeah from the vegetables she said am i doing said this year from the fruits and vegetables yeah from the vegetables she said am i doing that this year that's crazy right that's why i tell my husband we don't know that his son he may come here he's just being he's emotional michelle there's so much baggage and so much i mean he's anxious he's anxious there's so much there and i really would i would sit down with her party because he's not listening to you his wife and the fact that y'all aren't a team and an agreement is always a red flag the red flag goes up and that

happens in every marriage right to a point like something goes on yours rachel and it's it's perfect you agree on everything all the time and i don't want to be the bad stepmom that didn't let the son come live here because i i'm not the math the math isn't mathing, as the Gen Zers say. You're the planner. You're the wonderful, sturdy human being who's saying, hey, I don't want to give away three quarters of a million dollars to a 40-year-old man who has a job and a family of his own. Right. And that we need to figure out if he wants to move here and he truly wants to move here, then we can certainly help facilitate that and figure out how to do that. But it can't be. Well, let me flip it in reverse.

My parents live in a really in a great house in Texas, in central Texas, in a small town. They are talking about moving to Nashville. Their living their living experience is going to be radically different and they know that so if they move here it's not going to be apples to apples right because living in nashville is infinitely more expensive and like basic groceries and restaurants like it's yeah moving around real estate all of it's different so there's just a reality to it and that's why rachel like what she's saying is dead on this this is none of this is happening in reality that i'm gonna start a gardening company and save my neighborhood and then my

son is gonna carry on our legacy by the way the son that i didn't have much of a relationship because he cut me off or was out of the picture or whatever whatever was going on back then and. And so let's go ahead and give him a three quarter of a million dollar house. Forget the will, forget the trust, forget our joint kid. We don't care about that person. We're just going to do it. All this is in madness. And this is a guy who is spinning out, spinning out. He's to sit down and talk to somebody. Y'all need to to somebody and begin to to paint a picture that is rooted in reality yes and there's such a beautiful redemption part of this story right i'm like they've reconnected yeah it's amazing they want to be close to each other like in even proximity of living close together like i mean all of it is so good but just do it the right way and throwing

a house at the situation of someone that can't afford that part of the country or that part of the state it's going to do more harm. And then in the meantime, fracturing relationships, possibly with your daughter, with you, Michelle, because you're not fully on board. I mean, all of it. So there's a right way for this relationship to be healthy and so good. And what a gift, right? What a gift. But just don't let the money be the muddling, muddying it all up. This is The Ramsey Show. We'll be right back. This is The Ramsey Show.

I'm John Deloney, joined by Rachel Cruz, 888-825-5225, taking your calls on money, life, relationships, parenting, all of it. Let's go out to Oklahoma City and talk to Brandy. Hey, Brandy, what's up? Hi, John and Rachel. How are you? Good. How are you?

Good. Okay, so I'm really nervous, but I just started Baby Step number two, and it's super, super overwhelming. But I did have a question regarding one specific debt because I don't really know what to do with it or where I should place it. All right. What is it? Okay. So it's a debt settlement company and I am currently, I've paid two, it was for a credit card settlement. I've paid two off. I have two that they have negotiated that I'm currently paying. And then I have two that are unsettled. So I don't really know if I

should, because I'm really scared because I don't know, I don't want them to like take my money and run without paying for it, without paying them off. So I don't know if I should wait until they settle the last two or if I should try to get out of it or how to do that. I'm just really confused. Is that your only debt? Are these four? No, it is not my only debt. I have like $110,000 total in debt. Okay. And what are the last two? What types of debt are they? One is like a small bill to like AT&T. It's like $300's not very much and then it's a credit card to Wells Fargo and how much is that one it's $4,272 and that has the one that has not been settled yet okay and those two though are the ones that are not settled correct

right there I guess would be like still in negotiation okay okay and where are you guys at in that negotiation because I would hate for you to pay on it and you guys settle for a less than amount, right? And writing that you're able to, that that's the amount you actually pay for. When do you think it'll be settled? So the estimated settlement date is like September or October. I'm expected to graduate the program is what they call it in June of 2025. And if I were to continue to just make some $220 payment that I make a deposit into there every month, it would be like 3000 something that I would still owe. So I have included the 4,200 into my total debts. I know that just negotiated, it'll go down, but I'm not really sure how to navigate that, if I should just continue to just pay on it, like the minimum payment

or if I should like throw it, because it would be pretty like quick into my debt snowball if it was just this amount. So I'm not really sure where I should put it or what I should do in regards to... Right, right. ...go about paying it. Yeah, well, the $300 one, I probably, I mean,

that feels like it could just be settled, right? I'm like, you could just pay it off and it would just be gone, right? Yeah, I think so. I can probably get that one done. That one kind of popped up on me like a few months ago and they kind of just took it over. So I could probably get that one done. That one kind of popped up on me like a few months ago, and they kind of just took it over. So I could probably get that one taken care of.

Okay, are you able to get out of this? What kind of program? When you said, I'm in a program until 2025. Yes. So I started a debt settlement program. It was November of 2020, where basically I just, all of my credit card debt, I just. Gave to them.

They were settling it for me. Yeah. Are you in a contract with them or are you able to get out of this whole like thing, all of this? So, yeah, I'm not actually, I don't actually know on that. I'm not sure how they work. I had gotten a divorce like four years ago and I was kind of in a hard place and I didn't have any other option. But now I understand that it's not a good thing.

It's already happened so I can't really do anything. You can though. Your path forward is you taking back your autonomy, taking back your power in this, okay? It's your money and it's your bills. If you've signed a contract like Rachel said, you've signed a contract like rachel

said you've signed a contract and there's no way out but i would want to know how much you've paid off since 2020 four years later my guess is you've been paying money into a into a goat like into a hole in the ground and then you're still going to owe a whole bunch of money when this is all settled yeah and with their fees. Yeah. Yeah. Plus their fees. So they've just burned your credit to the ground. They've burned your ability to get yourself out of this to the ground and they've taken their fee money and you're going to get done. You're still going to owe $90,000 on all this. Yeah. Well, are you, is it just the four debts that are with them?

The two that are settled and then the two that are unsettled? Yeah, so I started with seven. I have paid three of those off since I've been in the program. So you have four left. Yeah, two that I'm currently paying on that they've negotiated. I've made 22 of 24 payments on one and 28 of 36 on the other. I'm not sure why they divided up like that, but that's the number. So what I would do, Brandy, is I would call them and just say, hey, I want out. I want out. And what can I do? And you may get charged a penalty for that, whatever it may be.

But I don't want these people. These people don't need to settle for you. Like you have the debt. We're going to figure out a plan with you right now to pay it all off on your own without them. I just don't want them part of your life. And if you can just get out clean and some of the money for the last four years may have been going into a black hole

and we just call that stupid tax that we do things and we're like, I don't know why I did that, but I did it, it's where I was. And now we're going to move forward. So I would call them today, Brandy, and just say, stop all the negotiations, all of it. I'm out. I'm done.

Can you just give me everything back in my name fully? Even the way they call it, you graduate. Yes. As though you're getting, that language is so manipulative. All of it. Okay, so Brandy, walk me through, because you have a lot of debt, and I want to know the whole picture. Walk me through every piece of debt that you have.

Okay. So between me and my husband, our total take-home pay is right at $100,000. It's like $99,000, like $800,000. And then my total debt is $110,000. And $66,800 is student loans. And my student loan payment is the highest payment of anything I have including my rent so I'm trying to move that away because that just overwhelms me and I hate it.

Sure sure and then the other four debts that you have with this is and then and those are what again? I have 33,000 in auto loans between three vehicles. I have a vehicle. My husband has a vehicle. And then he has a child with a vehicle that he pays on. Okay. How much are you? Okay. I owe $12,000 on mine.

He owes $4,000 on his. And then the child's vehicle is like $18,000. Oh, my gosh. Oh, my gosh. Oh, my gosh. How much could you sell that for? Or it's his child. I'm guessing this is a second marriage. Yeah, I'm not sure if I would be able to.

Because that was his gift to his kids. So I don't really know if I want to try to. I would just rather pay that debt down. I don't know that I would rather. I don't know that if I want to try to I would just rather pay that debt down I don't I don't know that I would rather I don't want to wrestle okay so here's the thing okay so I hear you I hear you but also Brandy you have to realize that when you are married and you guys are together in this that if you guys can combine everything and when I say that it's like we're combining debts we're combining incomes we're combining debts, we're combining incomes, we're combining budgets, like we are all one. You basically magnify sometimes the debt because one

person has the student loans, one person doesn't, but you also magnify the opportunity. And there's something about locking arms and doing this together, Brandy, that's really your best shot of getting out of this. The fastest and the most efficient is when you and your husband together say, we're on this plan to get out of debt together. And it's not just Brandy over here spinning her wheels and trying to figure all this out. And so how willing is he just in general to do this money stuff together?

Oh, he's very on board. That is one thing I have not talked to him about is specifically that vehicle. Okay. So that's one conversation we have not talked to him about is specifically that vehicle. Okay. So that's one conversation we have. And maybe that's on me for avoiding that just because I'm conflict averse. So maybe that's part of the problem. But I could have that conversation with him.

So you're conflict aversion. Maybe you are, but let this be the moment. Right? A conflict aversion, you've hired a company to deal with some of your debts, and it's cost you a lot of money and a lot of time and a lot of heartache. There's particular debts on the table in your home right now that you don't want to talk about, and you can create a story about how, hey, you know what? That's really not mine to talk about.

But as Bessel van der Kolk says, your body's keeping the score on this one. Okay. It knows that you're not all right. So put all the debts on the table. Let's go through all the debts. And talk to him that you're scared. I mean, Brandy, that you're stressed, right? Like come with him and just say, I want to do this together. And I just feel like it's an uphill battle.

And it's not. You guys can do this. You can, but bring it forward. The money you make and the amount of debt you owe, you can do this. You can, but bring it forward. The money you make and the amount of debt you owe, you can do this. Y'all can do it. Hang on the line.

We're going to send you Financial Peace University Total Money Makeover as our gift. That's one hour in the books. We'll be right back on The Ramsey Show. Thank you.