The Ramsey Show - App - I Have $622,000 in Debt - What Do I Do? (Hour 1)

Episode Date: January 23, 2020

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Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's the Dave Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I'm Dave Ramsey. Thank you for joining us, America. Common Sense for your dollars and cents. Open phones at 888-825-5225. That's 888-825-5225. Some say the advice is worth what you pay for it. Keep that in mind. All right. Catherine is with us in New Jersey starting off this hour. Hi, Catherine, how are you?

Good, how are you, Dave? Better than I deserve. What's up? Great. So I am currently on Baby Step number two and trying to pay off debt. And I'm wondering if you have some sort of cap on what a parent should pay on extracurricular activities. Just some background, my husband and I, my husband makes $62,000 a year. I make $110,000 a year.

We have $25,000 in credit card debt, $10,000 that he owes on taxes, and my $60,000 worth of student loans. Right now we have three children, and we are currently paying about $4,400 a year for dance. So I'm trying to justify this $4,400 bill now that we're trying to eliminate that. And I'm wondering if you think that's too much. Should there be a cap? Do I pull the kids? What's your opinion on that? Well, I think what you've got to ask yourself is,

can you achieve your goals of getting your finances under control while continuing this? And I'm going to let you decide that, obviously. But, you know, what I heard was I spent $4,400 on dance and I didn't pay my $10,000 tax bill. Well, that cannot continue. That's absurd. Right? And so we have to make arrangements out of your $172,000 income to get the rest of this mess cleaned up to even consider continuing this. And you have to be able to, if you're going to continue it while you're cleaning up the mess, you have to clean up the mess at breakneck speed. And so, you know, like I, you know,

like a lot of what you mentioned should be gone in a year with your income? $25,000, $10,000, you know, those kinds of numbers should go away making $172,000 in one year. Agreed? Agreed. Okay. So you guys have been out of control, disorganized, weren't watching what the flip you were doing, and you woke up and went, oh crap, we got to stop this. Well, good. That's a good move. That's a good move. That's a really good move. And so getting on a written budget with you and your husband. But don't tell me that you're going on vacation or going out to eat while you owe the IRS $10,000.

Right. And if you're going to continue dance at some level, maybe not the level it is now, but at some level, you've got to justify that by cutting deeper into your lifestyle in other areas. But you've got a bunch of debt, and you make a bunch of money, and so you should clean it up. Do you agree with that? Because you've already started, right? Of course, we've started it's just um i i guess you get into this gazelle intense mode where then you just want to start flashing everything and aside of me feels good secretly because the kids aren't responsible for the mess that we're in

right so well they're not responsible for it but they do live there they're you know they're not responsible for you getting taken to jail for not paying your taxes, but that can happen if you don't pay your taxes. So you need to do that, you know. So, you know, I agree that, but, you know, they're not responsible for your career, but it's going to affect where the type of car they get when they turn 16. So, you know, it's not their fault they shouldn't be punished so to speak i get i get your sentiment there but the other thing is this and you know what happened with sharon and i we went through this stuff was we had to ask ourselves okay where does our children's future come from and dr meg meeker talks a lot about that it doesn't come from the dance recital or the soccer field it doesn't come from travel hockey uh their future it doesn't come from the dance recital or the soccer field. It doesn't come from travel hockey. Their future, it doesn't come from piano expertise. You know, one percent or less of

our kids make a living in any of those areas. And so what are they learning in those things? Well, they've got an activity. They're out there moving. They're learning social skills. They're, you know, they're getting some physical fitness. They're learning social skills. They're getting some physical fitness. They're learning some character. But really what we had to realize was, you know, we're going to grow our character at home with our kids. So I'll give you an example. My son Daniel played ice hockey his whole childhood. I coached him some of the time I played when I was a kid.

But we had the opportunity to spend $10,000 a year more for him to play travel hockey. Now, he was a pretty good hockey player in a rec-level rec league in Nashville, Tennessee. He held his own upper part of his class, so to speak, would have been an all-star or whatever. He wasn't the best player on the team, but he wasn't the worst player on the team. We did know, however, fairly certainly, based on his skill level, he was not going to play in the NHL. So spending an extra $10,000 for a 10-year-old to travel did not make sense in our budget. And so, you know, it's not his future career.

It means we're going to be away from home a bunch more, and we're spending money we don't have. At that time, we didn't have that money. And so we just very easily said, you're playing rec league. And so, you know, one of the girls was a competition cheerleader, and, you know, we're spending a lot of money for this kid to flip. And so, you know, it had to be dialed back. The number of flips you're going to do, I guess, is going to be smaller. You know, I don't know. Because I didn't think she's kid to flip and so you know it had to had to be dialed back the number

of flips you're going to do i guess it's going to be smaller you know i don't know because i didn't think she's going to flip for a living i just didn't think that was going to happen so um you know the competition cheerleading thing we went through that so we've we've faced these same things at the ramsey house at different stages of our ability to pay for it and so you just got to judge it and go i'm going to use some common sense for this. Oh, and by the way, whether or not you're in a dance recital when you're seven probably does not dictate your future. It really shouldn't if you're doing your job with raising your kids. It's just a nice thing. It's okay, but it really shouldn't dictate who you become in the future. And so you've just got to, you know, activities versus character.

And Meg Meeker talks a lot about this stuff in Strong Fathers, Strong Daughters, in Hero, in all of her parenting books. And she's really, really on point on it. So, again, I'm not telling you not to do this. I'm not saying you're a bad parent if you did it. We did some of it. But just use some common sense and be sure you hit your other goals. If you're not hitting your other goals and you're not hitting them rapidly,

then that needs to be cut out. But do you have to do it making $172,000? Now, if you told me you're making $40,000 and you're spending $4,400 on dance, I'm like, you're done. You can't do it. That ratio is off. But you make so stinking much money, you ought to be able to do both if you watch what you're doing and make it your goal here.

It's a good discussion. Thanks for letting me have it with you. Thanks for calling in. This is The Dave Ramsey Show. We'll be right back. Are high health care costs getting you down? Are you confused trying to navigate your options? Do you wish you could find an affordable biblical solution to your healthcare costs? Based on New Testament principles, Christian Healthcare Ministries, or CHM, helps Christian families, churches, and ministries join together as the body of Christ to share their major healthcare costs. Christian Healthcare Ministries is the original health cost-sharing ministry.

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missouri hey dave my husband and i are getting ready to create a will he's a farmer i'm a stay-at-home mom we have two boys two ages two and a newborn my question is should we each have a separate will you have to because you're separate people or is it acceptable to only have one will in the case that both of us were to die at the same time. You can do less expensively what is called a mirror image will, where if he dies, here's what happens. If you die, here's what happens. If both of you die, the same thing happens from there on down. So in other words, the bottom section of the will,

the bottom most 90% of the will, is exactly the same if both of you die but it just addresses what happens to him if only he dies what happens what happens with his estate what happens with your estate if only you die but since the rest of it is cut and paste they don't they won't an attorney won't if they're prepping it with an attorney won't charge you as much as two completely separate estate plans. It's called a mirror image will. You can also do that at mama bear legal forms.com. If you're just doing an inexpensive will, got a simple estate, you do that. But anyone that is 18 years old needs a will. Even if your life is very simple, very primitive, whatever, it assists the people that

you leave behind cleaning up the mess that is your life it's called an estate plan if you don't have much of an estate it's a mess they got to get your bank account they got to get your car sold they got to get you buried they got to get the furniture out of your apartment and they don't have any authorization to do that unless you give it to them. So everyone needs a will. An 18-year-old living in an apartment with a negative net worth needs a will. Now you don't need much of a will. You don't need to spend $500 on a will if that's you. But for 40 bucks or something like that you can jump over at mamabearlegalforms.com and get you a basic state-specific will. Now, when you're doing a will, the reason I say state-specific is the laws that dictate an estate,

they're called probate laws, are not federal laws. They are state laws, and they do vary dramatically from some states to another. For instance, Louisiana has vastly different laws because they're French-based, and the rest of the U.S. is English-based laws, thus your history lesson, right? California is cuckoo on everything, including their laws on estate planning. So if you live in California, you've got a completely different cuckoo mess you've got to do. Florida, a little wacky. Texas has some unusual real estate laws, homestead and other things. And so you need to, the state-specific things. Now, some states are very interchangeable, but the state you are living in when you die

will dictate how your assets and your liabilities, your estate, are handled. So you need a will done that meets the laws of the state you are living in, your state of residence when you die, not the location of your death where you live when you die. You could die in another state, but you live in Tennessee. You would need laws for, like me, you would need, I would need my estate plan to align with Tennessee. Now, it takes into consideration federal taxes when you're putting together your state plan, but the laws that dictate how things are handled are in your state. Whether you can cut out a child, whether you can cut out a spouse, all these kinds of things are varied from state to state.

Always make sure you're doing stuff specific to your state, even how you sign the will. Some states require a witness. Some states require a notary. Some require neither. And so you've got to, you know, you can't just write it out on a piece of notebook paper like in some movie and they try to count that, okay? It won't work. Creates a pain in the butt for the people that are left behind. needs a will well let's talk about something else for a second that's a big deal if you're getting close to baby step four you're ready to invest and it's scary investing can be scary you know why something's scary either because it's scary and you should be afraid,

like standing in front of an 18-wheeler which is coming at you at 80 miles an hour. That'd be scary for a good reason. You should be scared. Or it's scary because you don't know, like learning to ride a bicycle. Scary if you hadn't done it. Scary the first time you get on snow skis. Scary the first time you get on water skis. Scary the first time you fill in the blank.

But once you learn to do it, it's not scary. That means knowledge removes fear from things that you shouldn't be afraid of, but naturally are because the lack of knowledge does that. Investing is the same thing. The problem with investing is that people in the investing world use $22 words to explain $3 concepts. You need a well-diversified portfolio with a certain amount of liquidity. Is he speaking English? What did he just say?

You know, well, you need to sit down with someone that can tell you that all that means is you need to spread your investments out in the group of things that you own, and you need to have some money, some cash money you can get a hold of. That's all I just said. But you need a translator, don't you? And so you sit down with a good investment broker in plain English to help you do that. That's how we put the SmartVestor Pros network in place, 1,200, almost 1,500 now,

SmartVestor Pros across the nation. You click SmartVestor at DaveRamsey.com. You're going to find someone. It'll drop down a list of the whole group in your area. You choose from among that group which one you want. They'll have the heart of a teacher. They'll speak English, meaning they will speak in a language that normal people use to understand investing. And you don't put money in something unless you understand it, not because I said to or they said to.

So you understand what you're investing in, and then the fear is removed. It's very, very important. So will somebody help you with your investing? There's a team you're putting in your life here. There's a series of things you're putting in your life to get control. Very, very smart. Very smart.

And we find a lot of the data points around people who build wealth are the ones that do these kinds of things joey is with us joey is in california hi joey how are you hey dave how are you better than i deserve what's up awesome um i'm 22 i'm about to move out of my parents house um nothing wrong with it just they would let me live there till i die so i want to move on but i make about i make about thirty five hundred dollars to four thousand dollars a month depending on commission um and when i was younger about a year and a half ago i got talking to a fleece so i have about a year left on my fleece and i pay between the car payment and insurance about $680 a month. Wow. So, yeah, it takes out a lot.

But I do pretty well with money. I have about $10,000 saved. That's good credit. So I just want to know what your suggestion is as far as moving out, what a good budget would be for the place. Is it like $1,200 or $1,400 a month? Just trying to get some tips. Yeah.

Well, we tell folks never to buy a home where their payment's more than a fourth of their take-home pay. Rent, of course, is patience while you're waiting to move to the next phase of your life, in your case, and buy a home. So you're not smart to buy a home right now. You're smart to rent. That's a smart thing to do. But obviously, rent is wasted money.

Agreed? Correct. And so the goal here would be to waste as little as possible. The maximum rent you should have will be a fourth of your take-home pay. So you're at $1,000, dude. That's your max. That's your max. And you really ought to do less.

You know, how much do you want to waste? I want to waste as little as I can waste. Now, what you do is you think about where you're going to live you get creative on that maybe you don't do the standard corporate out of the box apartment situation uh maybe you find a uh a wonderful uh apartment over the garage uh out back from some rich old lady's house and maybe you clean her gutters for part of your rent and you get a great deal that way because you're the sweet young man back there that takes care of the old lady. Whatever. You know, I don't know what the story here is, but you think you look at this a little different

because it's a temporary thing. Rent is camping until I get my house built. Don't spend too much on your tent. It'll affect how much you can spend on your house later. So you're good with money. I'd limit it to that, and I'd think differently about it. You can also consider roommates, other things to keep your costs down. Hey, man, you're going to be okay.

You're being smart. You're thinking, all except for that stupid butt car deal you did. This is the Dave Ramsey Show. Okay, I need you to listen to this. When you're on Wi-Fi anywhere in public or at home, you're at risk of hackers easily seeing every site you visit and search that you're doing online. It doesn't matter if you're on your cell or laptop. Public Wi-Fi is a hacker's paradise. They can see you visiting websites, streaming, downloading, or uploading photos, uploading files, and more. I'm not telling you this to scare you. I don't operate in fear, but I want you to be aware and take action. You need to download an app called cyber ghost vpn on any device you access

the internet with cyber ghost vpn helps you keep your connection on your own wi-fi and any public wi-fi secure and private over 34 million people worldwide have downloaded cyber ghosthost VPN. Download it now. Just search CyberGhost on iTunes or Google Play or go to CyberGhost.com. Megan is with us in Texas. Welcome to the Dave Ramsey Show, Megan. Hey, Dave. How are you? Better than I deserve. What's up? So, I need some wisdom. We are currently in Babyfoot 2.

We have already paid off $20,000, but we still have $36,000 to pay off. That includes a $1,500 medical bill, a car loan of $13,000, and a truck loan for $22,000. Our household income is $22,000. Our household income is $110,000. And our issue is that we need help prioritizing and staying on track with the baby steps, especially with some issues that are on the horizon. We have known for a couple years that our foundation is needing to be repaired, but we've been putting it on the back burner. And now we're noticing there's some cracks in the ceiling and things like that.

So we're thinking it needs to be addressed sooner than later. And then our roof is 16 years old, and it probably needs repaired soon. And then there's other things like our kitchen is going to be updated and our couch is falling apart. And we just need to know how do we prioritize and address these issues appropriately, but then still stay on track for paying off the debt. I don't hear anything there that you're going to fix until you're out of debt. Okay. Because then you're going to have the money to fix them.

Yeah. The house is not falling in. It's got a crack in the living room ceiling. Most houses do. It's been this way. It's been working on this for five years. You should be out of debt in two years or less. And if you can't be, you need to sell the truck.

You may need to sell the truck. Our goal is to get out of debt this year. Good. You can pay off all that that you outlined in one year? We are, I mean, if we cut everything that we can and, I mean, get really, get bail and pens, I think we can. Good. Good.

So this time next year,'re fixing uh the first repair that's the highest priority okay that's cool just put everything on the back burner then there's nothing on fire there's nothing you outlined that can't wait a year a kitchen remodel can wait five years i don't want to because i hate a stinky bad bad, old, ugly kitchen, but that's a luxury upgrade. A house that's got some settling issues, unless it's got something that's dramatic, will wait a year. Okay. I guess in my mind, I was just thinking, well, if we wait, there's going to be more cracks, and then we're going to have to do more repairs with the drywall and things like that.

It might cost you an extra $500 or $1 that's possible whoopee okay you make a hundred and ten thousand dollars and you've been broke your whole married life it's time to change yes you've been buying stupid cars you couldn't afford on payments long enough you have to break the back of this thing kiddo and you're in the process of doing it it's just scary and it feels like it's going to be longer than it is i mean think about what you're doing this time last year i mean you snap your fingers here we sit a year later right a year goes so fast it's crazy yeah it is and so you're going to be you're going to be working on the most important thing and i think the most important thing in what you outline might be unless the roof is in worse shape than you described it might be

the settling might need to be fixed first and then you would fix the roof is in worse shape than you described it might be the settling might need to be fixed first and then you would fix the roof those are more necessities upgrading the kitchen would probably be your third but you just start laying out just like you did with your baby steps you start laying out an order of priority and you save up and fix that one save up fix that one save up fix that one okay all righty my husband will be happy because you can do it he's like just you're like just follow the plan follow dave's plan yeah well it is it's just what happens is you're looking at that stuff and your emotions are telling you you're never going to do it but when you and i lay out when i when you and i lay it out intellectually

you're saying we're going to be done in a year and if you think that's not fast enough you can sell the truck and that would cut half of your time off you know so are you panicked enough about the settling to do the settling fix six months sooner if you are sell the truck are you that panicked i'm i'm i'm not but if you are this moment do what not at this moment but it's not like if you know there's more cracks and things like that then i might be a little more you know well i mean so by summer you got everything paid off but the truck right because it's your last big one wasn wasn't it? Correct. Yeah. So if you get down to that, and that's the last thing, and the thing, the house

starts shifting, and you know, you start freaking out, sell the truck. You're debt-free. Then you can start, and in 20 minutes, making your kind of money, you'll have the money saved up to fix the foundation and the cracks. But if you can wait long enough to get the truck paid off and keep it, then you're probably sitting at this

time next year, with the numbers you gave me, and that's what you said your all's plan was. So I think you're okay. I think you're okay. But you're right. You have to cut down to beans and rice, rice and beans, and you're not going on vacation this year, and you're not going to be seen inside a restaurant unless you're working there,

and, you know, so much stuff's up for sale, the kids think they're next, and all that stuff, right? Gazelle intensity. We're game on, right? Game on. And you got some real motivation to do that because you want to get out of debt so that. Your first so that you can do these home repairs. Your next so that might be you retire with dignity or fund your kid's college fund.

Your next so that might be that we change our family tree your next so that might be that i want to give away a million dollars not just have a million dollars you know you can change your so that's your why as you go along right now though you got a pretty good why they got cracks in the ceiling that'll get your butt in gear and uh and and keep you can sell intense and keep you focused and anytime somebody wants to do something you you know you just look at them and go no you know and that's that then we can stop that right we're good with you see the cracks in the ceiling no we're not doing that we got to get out of debt so we can fix this stupid house and once you get that stuff dialed in that then you know what you've got to do

to do it then it's easy to keep everybody else in tow and on track you're doing good you're doing better than you feel like you're doing. All right. John is in Arkansas. Hi, John. What's up? Hi, Dave. It's great to talk to you. I really appreciate your time.

My wife and I have been following the Baby Steps for about three years now. We're at Baby Step 3B to save a down payment. Cool. I'm in my mid-30s. My wife's in her early 30s. We've got four kids who are five and under. We have no debt. We have household income with just me working is 86,000 a year. And the thing was about three years ago when we moved where we are, we rented because we

do not have the down payment yet. And so our rent is fixed at $1,100 a month. It's a friend, and so he's not going to raise the rent on us. I read your blog post. You say not to rent for too long. And now that it's been about three years, I'm really starting to feel anxious about not renting long-term. So my question is this. If we do not have the down payment saved yet um is there are there

any other circumstances where you'd say yeah it should be okay to go ahead and and look at buying a house under these circumstances no you should have a down payment to buy a house you're okay okay you're okay all we're discussing here is a year in a year you're going to be ready, aren't you? It should be about a year. I've got some bonuses. Yeah, that's not exactly long-term. I mean, it's not like we're sitting here worried about you being a renter 10 years from now.

It's one year. Now, what if it were to extend beyond that? Like, I've got to replace my car this year and so i'm looking at getting paying cash obviously three four thousand dollars it's going to put us back but you know so what if it took two years three years are you getting worried no i'm not getting worried as long as you're getting there but obviously the more expensive a car you buy or can you put off buying the car in order to get a house i'd rather have a house in a car um you know that kind of stuff and so i'm gonna i'm gonna put off the uh i've always dreamed of traveling to australia you know i'm gonna put that off i'm gonna put

that off to get this done what i don't know what it is whether it's a luxury item but um and you know maybe you need to work extra to hit some of these goals. Maybe you need to create some extra income, a side hustle. But no, you know, listen, you cannot make up enough excuses to say, I want to buy a house with no down payment, because that's like saying, I got enough excuses to be stupid. And that's not going to be a blessing to you. It's going to bring curses in your life. Don't do that. You want the house to be a blessing? Thanks for the call. One of my favorite parts of this show is hearing your debt-free screams. You guys are our heroes. You've kicked debt to the curb and you've saved for the future. Now we want to celebrate with you.

If you have lived like no one else and are currently in baby steps four through seven, well, it's time to enjoy some money. And the perfect place to do that is on board our first ever live like no one else cruise in March. That's right, just a couple of months away. But get this, it's not too late to book your cabin. So don't miss your chance. This Caribbean cruise is going to be an incredible seven days at sea on a stunning new ship with amazing experiences. I'm talking all of our Ramsey personalities and other world-class entertainers. We're stopping in the Bahamas, Puerto Rico, St. Thomas, and Turks and Caicos.

It's going to be an amazing, debt-free celebration designed just for you. Don't miss the boat. Head over to RamseyCruise.com today to reserve your room. Thank you for joining us, America. Jamal is with us in Texas. Hey, Jamal, how are you? I'm doing good, Dave. How about you? Better than I deserve. What's up? I got a huge mess on my hand.

I was hoping you can help me. I'll try. I have $622,000 in loans. $632,000 in what? $632,000 in what? $22,000 in loans. In loans. On what? Credit card and business loans.

How much is credit card and how much is business? $297,000 business and $325,000 credit card. So you ran your business on the credit cards too then? Yes. Okay. How's the business doing? Business was doing okay and then last year it started to not doing okay. So I make less and less money. Revenue went down. It's two stores and I can actually sell one of the stores. And then if I run one store, I can make four or 5,000 a month. What kind of stores, what do they do? Grocery stores and cell phones.

Okay. And I used to have a good online sales and that went down and they've got everything. And to top all of that, I'm going through divorce. And that, not to blame on it, but I made some huge stupid decision in last two, three years that accumulated the debts. So now I'm at a stage where I can't make minimum payments. It's been almost two months where I haven't made payment to half of them.

I can get some money together by selling the store like $30,000, $40,000, and then I can get $4,000, $5,000 a month savings. But I don't know how to start and who to pay. The store will sell for only $30,000 or $40,000 each? No, the one I'm selling will sell about $30,000, $40,000. The one I'm planning to keep and run, they'll sell about $100,000. What did you do before you opened these stores? I was an IT consultant.

Okay. And what happened to the online sales and how much were they? The online sales, I was doing about a million a year for the last four years. Top line. What did you net on that? Top line, yeah, about 15%, 15% to 20%. What happened to that? what's it running now and now it's running it was running very slows down it was running about 250 000 a year but then i'm gonna after i stop paying these creditors they put a hold on the online accounts so now it's zero they put a hold

on your accounts online accounts Online accounts, yes. A couple of the business creditors, they had a UCC filed on my business, so they sent the UCC to the online marketplace, PayPal and eBay and Amazon, and they hold my account, so I can't sell online anymore. You can, but it all goes to the creditor. Right, exactly, yeah. Okay. Why did your sales go down online?

I was counting on two suppliers. I was dealing with them for like about six, seven years, and they stopped dealing with the laptop that I was buying from them. I had a couple of suppliers, a couple of wholesale customers, line that setup. Every month I was doing pretty good with that, a couple of suppliers, a couple of wholesale customers, line that set up. Every month I was doing pretty good with that, and all of a sudden both of the suppliers, they stopped dealing with computers. And I was just buying big lots from them, cleaning it up, and selling that in the evenings during the day I was running my store. Okay.

It sounds like that your online has always been, with the exception of lately, the most successful part of your business. Yes. And I think these stores were a dumb idea and became a distraction to a successful online business. Sounds that way now, yeah. So I wonder if you couldn't, the creditor that took the UCC-1, what do you owe them? Is that the $297,000? Yeah, it's not a whole amount.

The $297,000 is divided among six creditors. Okay, what's it take to clear that creditor with UCC1? About $55,000. Okay. So I wonder if you don't crank up your online sales again and go source that. I think the reason you lost all of that was the normal course of business is attrition with suppliers and with customers. You're constantly having to reset suppliers and constantly having to reset new customers. That's the normal rhythm of business.

I think you were distracted by your home life and by your stores, and you took your eye off the ball on that. And I think if you focused again real intently on the online side, you might get up and get that UCC one guy paid by just raising your sales online. That would clear him and get some income coming in. Because your highest income potential that you've outlined here is not the sale of stores. It's restarting and revamping and reviving your old online business. It was the cash king.

Right. That's exactly right. That was the cash king. Right. That's exactly right. That was my bread and butter. My big concern is now where I'm making, even if I put real good effort, I can clear this UCC. But what happens when the next guy files the UCC in two months? Well, the credit cards aren't going to do that. They're just going to sue you, some of them, and it'll be six months more.

And then, you know, what you're going to do, your goal is to plow through the 297 first and then go back and clean up the credit cards. I just stopped paying the credit cards. You've got to decide who you're not going to pay anyway. You can't pay somebody, so don't pay any credit cards. That was one of my questions. I stopped because I've moved my business to cash now, but I'm still doing minimum payment on the cards and if i stop then can they get hold of my bank

accounts eventually eventually they'll sue you and they could take a lien on stuff but you'll get around to them faster than that if you can get your income back up to a couple hundred a year which you have done before but yeah the way i see it if i can like do all that is going to take me probably a few months to two years yep yep it's that or it's either that or file bankruptcy that that was my thing like yeah my biggest concern is that if i do all that effort and then they put a lien on my bank account now i can't run my business so then well you'll go back and get it cleaned up you can sell these credit cards for 25 cents on the dollar once they go bad i'm not suggesting that that was a good plan but it's where we are um and you can go back and clean them up as the last step in cleaning up this 600 grand um and so you clean

off the other stuff first and then you go back and you work those credit cards and you just work the the one that's the most aggressive legally, not the most aggressive on the phone. They'll wear your butt out on the phone. It's the nature of the beast. Yeah, they started being happening now. Yeah, they're nasty, and so you just have to hang up on them and move on with your day.

But because, you know, you're going to do the best. If you don't work this plan, you're bankrupt. So you've got to work some kind of a plan where they don't get paid so that they get paid. Right. That's what you're facing. So, yeah, I mean, you can file and just start fresh and just, you know, turn the keys over to the stores and walk away from the whole thing. And, you know, and you're going through a divorce and everything's a whiteboard in your life. You just get a fresh start on everything. Go back to IT for a while, lick your wounds,

get healed, start your life over. You can do all of that. I always recommend with bankruptcy that it's like divorce, that you do everything you can to keep from doing it. And when you've done all you can do, if you still are forced into it, then at least you don't have the regret of I just willy-nilly just tossed in the keys. On something as big and life-changing as those things are, you want to know that you did everything possible to avoid it,

and then you don't have regret. I can tell you, at the time, with what I knew at 28 years old, with the creditors chasing me when I was going bankrupt I fought it for two and a half years and I repaid most of the debt during that time but I still got boxed into a corner and I didn't know what to do and I ran out my emotional and spiritual gas tank was completely empty I was completely freaking out and terrorized. And I had done all I knew to do. So I have no regrets. I tried everything I knew to do. I left it all on the field.

And so I don't look back and go, well, I was just a bad guy who didn't pay his bills. No, I did everything I could do. And you want to be able to say that to yourself in the mirror. That's what I want for you. This is the Dave Ramsey Show. Hey, it's Kelly, associate producer and phone screener for the Dave Ramsey Show. If you would like to do your debt-free scream live on the show, make sure you visit DaveRamsey.com slash show and register.

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