The Ramsey Show - App - Why the Housing Market Is Different Than 2008

Episode Date: June 2, 2022

Dave Ramsey & Rachel Cruze discuss: Should you buy a house in cash? How this housing market is not the same as 2008's, Should you sell a house to get out of debt post-bankruptcy? Want a plan for your money? Find out where to start: https://bit.ly/3nInETX Listen to all The Ramsey Network podcasts: https://bit.ly/3GxiXm6

Live from the headquarters of Ramsey Solutions, it's the 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. The Ramsey Show is where we help people build wealth, do work that they really love, and create actual amazing relationships. Rachel Cruz, Ramsey personality, number one best-selling author, is my co-host today. Open phones at 888-825-5225. Michael is in Miami. Hey, Michael, welcome to The Ramsey Show. Hey, Dave. Hey, guys. How to the Ramsey Show. Hey, Dave. Hey, guys.

How we doing? Better than I deserve, sir. What's up? Not much. I'm 28, as you said, here from Miami, and I'm self-employed. I've managed to get myself out of $60,000 in debt, which took me about a year to do. Good. Yeah, thank you, sir. And my question is, I'm currently renting now,

and I've managed to save up $550,000, and I honestly don't know what the best thing to do as far as investment-wise, and I'm honestly looking into buying a house and buying it cash. And, you know, I know you're the perfect person to talk to about it, so I wanted to, you know, see what the best way to go about it is.

Dude, you went from 60 grand getting out of debt to 550,000 in the bank like it was nothing. What the flip did you do? Oh, well, I took a lot of lumps in like four different businesses that I started, one of which was the reason I got into the debt, you know, because I started with like $5,000 and the rest was credit cards. So I made some big mistakes when I was younger and always been a serial entrepreneur. And, you know, this last one I started, it's going on a year and a half now. I've done all the mistakes I've learned from that allowed me to make it work. Okay.

So you just, you hit a lick with your business. All right. Good. And it was kind of after you got clear of the your business. All right. Good. That's amazing. And it was kind of after you got clear of the debt. Yes, sir. Wow. That's interesting.

Well, before, technically. I had to struggle to get out of the debt, and then that allowed me to be in a position to start the business and then make it work, not off of debt. No, I'm saying the $550,000 all came after you cleared the debt. Yes, sir. Yeah, that's what I was trying to get my head around. Good. Good for you.

Well done. Proud of you, man. Thank you. That feels pretty studly, doesn't it? Oh, man, it's amazing. You know, the challenges come up, and you just got to persevere and, you know, stay true to your gut. So have you looked, Michael, at houses in your area that you want to live for that amount

of money? Oh, yeah. I can get a nice one-one around here in Miami. These are some of the most outrageous prices I've seen. And part of the reason why I'm still renting is the red-hot market. And I know the market's kind of tapering down a little bit around everywhere else. But, you know, it's rough out here. Yeah.

It really is. Yeah. A one-on-one is about all you're going to get in Miami proper, in Dade, for that. Because it's an out here. Yeah. It really is. Yeah. A one-in-one is about all you're going to get in Miami proper, in Dade, for that, because it's an expensive market. It kind of thinks it's New York. Wow. I mean, pretty cool. Okay, so here's the thing.

A couple of observations about your situation. Number one, I'm going to send you a copy of the book Baby Steps Millionaires that shows you what millionaires have done. We studied in the back of it is a synopsis of the study, a white paper of the study of the largest study of millionaires ever done in North America. Airtight research. So these are what are known as facts, not opinions with your broke brother-in-law. Okay. These are facts.

Now, the biggest thing that we found was the biggest correlation that we found among the first people to have a million to an $8 million, $5 million net worth, the first $1 to $5 million in net worth, comes from two things a paid for house and a fully funded rocking 401k roth ira investment retirement program okay so we often found a 42 year old um that wasn't making anywhere near as much as you're making and so it took them to 42 um and they had a million in their 401k and a paid for $600,000 house. So their net worth was a million six. We found thousands of those that we interviewed. They're all over the place.

Okay. So what that tells us is if you want to be one of those, that's your two best routes to get there. Paid for house, fully funding, loading up retirement. Okay. best routes to get there paid for house fully funding loading up retirement okay the danger of how the wonderful experience you've had is it's the same thing that happened to me in my 20s i had four million dollars worth of real estate by the time i was 26 starting from nothing and i thought i could just do that all the time and i and i thought that i couldn't do anything wrong and i i fell prey to and i want to warn you against this, the idea that I could out-earn my stupidity. No shot.

You know? And it's because you've been making bank, and you can go, well, I can screw this up and still be okay, you know? It's hard to do out here, Dave, because, you know, I live in a place where what I call the flex factor runs rampant. You live in the ultimate flex neighborhood. Yeah, indefinite. Flex of all kinds. Yeah, it's all flexes there. I get you.

Yeah, for sure. And if you don't believe that about Miami, just go to Miami Beach, okay? So, oh, my gosh. So, yeah, you can really fall off into that and start to believe your own handwriting. So be careful. I would continue to make money and continue to live like I'm not making any money for about two more years, and you're going to have all the money you want for the rest of your life, probably. Are you a single guy?

I'm with my girlfriend, and we're going on about four years now so you know a couple of milestones are definitely around the corner uh for us you know uh getting married and everything would it be okay to go make another 500 in the next year and a half and um bank that and then let's talk about buying. Would that be okay? Yeah. No, absolutely. Like I told her, her parents are in real estate in the Bay Area, Miami, and I'm not in any rush. And I saw your show yesterday, and what you're saying is you definitely don't want, you definitely, if you're going to get an investment property, make sure you're getting a deal. And deals are kind of hard to come by right now. No, there's no deals there's no deals yeah well i was wondering if i should look elsewhere

you know just you know but i don't know i mean if you wanted to move inland and move uh what northwest out of there um you know up fort lauderdale direction you know you you probably can you probably can get your prices down considerable and get in a lot more reasonable thing if you want to go ahead and get in the market. That's fine. I just don't hear an emergency here for you to buy. No. I do want you to buy in the next three years, but I don't know if I care if you buy in the next three months.

Okay. Okay, yeah. Well, I get out of this lease in February of next year. Yeah. in February of next year. So what would you suggest? Probably starting to look into some other investments, maybe a mutual fund. It doesn't even have to be. It's a year.

It's not even a year. It's February. I mean, you're going to pile up so much more. How much more can you have by February? To be honest, I'd say at least another $250,000. Yeah. It's a different250,000. Yeah. It's a different discussion, right? Yeah, a little bit of movement northwest and another $250,000 in February.

Changes it. I just think, you know, and then just be careful to not try to out-earn your stupidity. And I think you're a sharp young dude, man. I'm proud of you. You're killing it. I love entrepreneurs. Congrats, Michael. Well done. And if there's a ring on her finger, she may have a say on where you guys are going to live, too, if you get married.

Yeah, if you buy a house when you're a single guy, after you get married, you'll discover you bought the wrong house. So this is The Ramsey Show. Life has thrown a lot at us these past few years, hasn't it? You've weathered so much, and you're still standing. But it's taken a toll on many areas of our lives. Well, there's hope. Smart Conference is back, and this fall, we're bringing this world-class event to Dallas. You'll walk away empowered to grow in every area of your life.

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Go to ramseysolutions.com slash events to learn more. Again, that's ramse is my co-host today. If you can imagine the energy of a jam-packed arena filled with people ready to experience what it means to live life to the fullest, all of your favorite speakers on one stage empowering you with tools and principles that will create unstoppable momentum in your life, well, that is Smart Conference. Smart Conference is back. It's been three years, and we're so pumped to get this event back on the road in Dallas, Texas, Saturday, October 22nd.

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sure okay so he just said on the last call you know that things are kind of slowing down i think people were kind of feeling that even in nashville a little bit it's not like insane like it was six months ago and i've heard you say how the housing prices will probably not dip down right like 08 right so the difference or what is the difference in the market from 08 to now because people i've heard people say well i'm going to wait until the prices go back down and they're not as red hot to buy today because the prices are crazy to buy a house right now um but they won't go back your, if you had a crystal ball, that they're not going to go back? Is it because the 08 crash had to do around all the borrowing from mortgages

and security-backed loans, all of that? Is it because that recession was fueled by the real estate market that it went down and this is different? Or what's the reason? Because I hear that question constantly of like, oh, people think that the housing prices are going to go back down. It's not always as simple as supply and demand, but it almost always is. Now, what causes the supply shortage and the demand increase or the demand to be down and the supply to go up is varying things.

And you can start looking at that but the the root issue of what drives house prices almost always is supply and demand uh and that's true so you know the the old joke of in an appraisal class you know i was in appraisal class give me an old joke of the old appraisal class well it is much it's real estate has one joke and this is it what you know what determines the price of real estate location location and location yeah but not really because so in other words you could take a concrete block house that's a thousand square foot and put it in the rich end of town and it'll bring a whole lot more than a really nice house and the dumpy crime ridden horrible end of town right okay so it's not the quality of the house it's not the thing it's not the mortgage rates it's it's where the stinking thing sits

okay the people perceive that why does that affect it well because more people it's more desirable to live over there more people chasing that piece of dirt than chase the dirt over in the other end of town yeah and so it is supply versus demand ultimately now interest rates affect that when interest rates go up guess what fewer buyers yep so the demand goes down thus prices are going to soften or not be as cray-cray as they have been right and that's what we're seeing right now uh if supply can go up even if interest rates go up if supply went up faster if we could double the amount of houses on the market by snapping our fingers and interest rates went to six percent which they are okay uh or five and some change whatever right uh then you would see

uh demand you know you'd still see because there's 10 houses for every two buyers instead of two houses for every 10 buyers yeah that's the problem is that we're always facing right is this supply demand thing now in 2008 what happened was there was a tremendous over supply because they foreclosures went everywhere and the market just froze nobody was buying houses had nothing to do with the economy really had nothing to do with interest rates it had to do with there was a real estate panic and people quit buying and there's this huge supply we dumped a bazillion properties on the market and all the buyers are standing on the sidelines looking at it so almost no demand huge. So you see one time in the last hundred years that real estate prices actually went down.

And that was 2008. But that was huge supply, almost no demand. Now, what do we got right now? Shortage of houses. And the buyers are calming down because interest rates are going up. And supply is catching up slowly because some of the new housing stuff is starting to come back on. Labor shortage is starting to a little bit be alleviated. Some of the Biden bucks are running out.

People are actually having to go back to work. The lumber prices have stabilized. So new housing is coming on the market again at a better rate than it was, say, a year and a half ago. So we got a little bit of supply up and a little bit of demand down. And so we've got a softening in the rate of increase of price. But you're not going to see prices go down because you're not going to see the demand versus the supply shift enough to cause prices to go down. Okay. It's great.

That's what I keep looking at. Real estate 101. enough to cause prices to go down okay it's great that's what i'm that's what i keep looking at and it's really not one yeah it's but it's the old appraisal class we all just got to go through america there you go by the old by the old guy but that's what i wanted to know though because we keep because i you know i mean it's still even within our friend group it's like people are talking about okay well buying and this we want to do this we've got a hold off here and you know and you hear the rumblings of we're just going to wait 12 months until prices go back down. But here's the reason the economy and the stock market and real estate is so interesting, because it really is, at the end of the day, psychology.

It's what are the buyers going to do? What are people going to do? Are they going to act? How are they going to react? And if everybody thinks facebook's going to be a big deal you know what facebook stock goes up if everybody thinks apple is the second coming of jesus then apple stock is i mean apple has more money than egypt literally it's crazy and so you know uh this kind of stuff right but but what it amounts to is is its perception

people believe it and they make it so it's a self-fulfilling prophecy out there in the economy all the time. And so if enough people believe that the market is wonderful and crazy and white hot, then they go behave like that, and an asking price on a piece of real estate is no longer an asking price. It's a suggested starting point for the auction. And so because of the cray-ccray it's all the psychology on it and so but if everybody suddenly went you know what i'm gonna chill boom you would you would freeze these prices like a deer in the headlight and so we see that like if you go all the way

back to when i was a kid like 1982 okay and carter interest rates fixed rates for mortgages went to 18%. Well, guess what? No demand. But house prices still didn't go down much. I mean, they did. It was just for a little bit. But you couldn't give a house away. I mean, if you had to sell a house, it was probably going to be maybe a little bit of a discount.

But they still sat there and then stinking prices came down to where i'm 24 years old selling houses in 1984 at 14 fixed rates that year they announced this brand new type of mortgage called the adjustable rate mortgage and arm in 1984 you could get for 12 where your your fixed rate was 14% and people are lined up around the block why because all those people that didn't buy for the three years prior to that because it was 18 and 17 and 16 all of them came into the market in one year boom market took off went crazy at 14% interest rate yeah that's nuts that's nuts but it's all supply demand it underlying it now different things cause the supply to be up or down yep the demand to be up or down but always be looking for that that's going to tell you what's going to happen with the market this is the ramsey

show We'll be right back. In the lobby of Ramsey Solutions on the Dead Free Stage, Judd and Christy are with us. Hey, guys, how are you? How are you doing, Dave? Great, man. It's good to have you guys. Where do you live? We live in Sandwich, Illinois, right Christy are with us. Hey, guys, how are you? How you doing, Dave? Great, man. It's good to have you guys. Where do you live? We live in Sandwich, Illinois, right outside of Naperville. Okay, Naperville, Illinois.

Awesome. Good to have you guys. Welcome to Nashville. Thank you. And all the way here to do a debt-free scream. So let's say Gulf War veteran, thank you for your service, sir. Thank you for your support. How much your debt do you pay off?

Around $135,000. Cool. How long did that take? We started full force around 2017 and then just paid it off April 28th. Paid our house off. Oh, house and everything! Mortgage and all. Look at it, weird people!

So 17, so five years? Okay, good, good, good for you. And your range of income during that time we started at about 100 and ended about 140 000 cool what do y'all do for a living uh i'm a paramedic firefighter and uh union plumber i'm a hairstylist awesomeness very good so what kind of debt was the 135 just the house no we had uh we had a business um we had a van, and the house. Okay. Wow.

Good for you guys. Well done. How does it feel to be free? It feels pretty good. We just had our first mortgage payment that was supposed to go out two weeks ago, so it still hasn't quite hit us 100% yet. And it landed mysteriously in your account. Yes.

And the best part about that is the mortgage company hasn't released our tax money yet. So we had to dig into our emergency fund to pay the taxes that were due on June 1st. So hopefully when we get back home, we'll have the money that was escrowed for our mortgage back from them. So we'll be able to put that back into our emergency fund. Wow. They can't even do that part, right? No. It took them a month. Who was it, Countrywide? Caliber. Caliber

Home Loans. Okay, good, good. Oh my gosh, you got rid of them though. Yep. You're done, man. The funny part with Caliber is it took us seven hours and nine people to figure out how they actually wanted us to send the final payment in. No. And got, we must have got 11 different ways they wanted us to send the final payment in. No. We must have got 11 different ways they wanted us

to send the money in and it was pretty exhausting. Every time we called and talked to somebody different, they would tell us a different way to send it. Unbelievable. They wanted to keep you guys. They like you.

And the last month that we had our mortgage, we heard from three different people with less than $3,000 left on our mortgage wanting to refinance. Of course. Oh, my God. Always. Y'all, but you're done. Wow. You are done.

What started this process in 2017? Well, it started a long time ago. We were at Davis for years. Our parents bought the program for my wife and I, my brother and his wife. And we started on it. And the next thing you know, we bought a truck. Just like that, yeah. Just bought it and paid it off quick. And then we bought another car and paid it off quick.

And then we bought a camper and paid it off. And then finally, just after buying everything, and just something clicked in the summer of 17, and that was it. Christy had a shop that we had to shut down. It wasn't working, so we shut it down in April of 19. And right before COVID hit, thankfully, we were able to shut it down. Thank goodness. We wouldn't have been able to afford it. We paid the van off and paid the shop off in summer of 19.

And then that's just ever since we had about $85,000 left on the house. Dig in. Just something in the summer of 17, it just clicked. And it was just full force. Way to go, guys. How does it feel to be free? It feels great. We finished our last FPU class.

The last class of our first FPU class, we finished that for church for our church and uh we did it there and we we really pushed hard to make sure we had it done because we were coming down here our daughter turned 21 last week so we wanted to bring her down for that and roll this into there so push it all together yeah good good that's amazing you guys so what was the key to this journey to pay off the mortgage, pay off everything? The budget. The budget. I mean, we struggled with the budget at first and got better. You know, you say three months.

It took us forever to get it down. But we kept talking about it. We kept working with it. And then we just finally, you know, the last year, year and a half, it just really, we really got more in tune with it and then uh and we just finally you know the last the last year year and a half it's just really we really got more in tune with it and that's when it really started we paid them in the majority of our mortgage off in the last year and a half christy what was he doing to mess up her budget bugging me all the time he's a little ocd i can tell i could tell yeah all right good for you guys oh man so doing the budget doing the budget everybody says that but then that something that clicked is just as

important right i i don't know what i don't know what it was that clicked it's just it's just we we would talk about it and you know next thing we had a we had a you know like i said a truck payment or a camper payment or another van payment we'd hurry up and we'd pay it off and then we'd be debt free for a couple of couple of months and the next you know there's a new vehicle sitting in the driveway and it just happened just it just happened i don't know carvana just bought one of those little trucks over yeah right right and then it's just like so just the summer of 17 it's just you know we we wanted to be we wanted to have it done and and it's i don't know just something clicked i don't i can't describe it yeah so christy judd got he got game on he got

task on and then there wasn't no stopping it no what's i'm grateful for yeah absolutely absolutely that's good good stuff you guys. Yeah, absolutely. For sure. Absolutely. That's good. Good stuff, you guys. Very, very, very well done. Who were your biggest cheerleaders? You said you had an FPU class at church, right? Right. They were definitely huge supporters.

My parents, a couple of guys from my firehouse were huge supporters. Just friends and families and mainly us. We'd talk about it to our other friends. Not everybody was really interested in it, so we didn't really push the issue and just kind of dealt with our own. Now you've got a paid-for house. What's the house worth? Right now, about $275,000, $300,000. That's so cool, man.

You brought the kiddos with you to be in the dead-free screen, right? We got my daughter, Faith, and my son, Louis. So great. Happy late birthday. Yeah. Well done. Good stuff. Good stuff, you guys.

And she just purchased her first car cash. All right. Way to go. Way to go, Faith. Congratulations. Love it. And I just, you know, doing stuff like this and just watching Armani's helped us, you know, just we've had, it's on the backstage, we have our 16th foster kid and it's helped us do stuff like that over the years.

Wow, you guys. It's, you know, just paying attention to your money and just, you know, like you say, telling it where to go has really helped us out. And we've had education funds built up for her and for him now. So she graduates nursing school next year debt-free. Wow. That's changing your family tree. That's the stuff. Yeah, that's awesome, you guys.

Y'all are incredible, incredible people. Good job, you guys. Good job. Well done. Wow, good stuff. All right, so we're going to be a fireman, and we're going to own a hair salon and or cut hair right and we're gonna have a nurse we're gonna do all of it debt free and we're gonna be millionaires well the next 10 years i'm gonna be retired so we're not you know i'm not

looking at too many more uh you'll be millionaires you really will you're on your way you got all the stuff in place yeah copy of baby steps millionaires for you to help guide you through this next part of your story you guys are incredible you're heroes i'm so proud of you thank you thank you so so much well done also a copy of total money makeover for you to give away to someone and we're going to give you a gift card for the uh one year subscription to financial peace university and every dollar through ramsey plus and you can give that away and get somebody else started because you've enjoyed it already. You've got a lot of stuff you can give away that way.

And a lot of people are going to want to know what you did when they find out you paid off your house. So well done. Judd and Christy, Faith and Lewis from Illinois, $135,000 paid off in five years, making $100,000 to $140,000. Count it down. Let's hear a debt-free scream ready three two one we're debt-free

that's how it's done man incredible this is the Ramsey Shack. Thank you. Rachel Cruz, Ramsey Personality, number one bestselling author, is my co-host. The new book is Know Yourself, Know Your Money, our latest number one. And you can learn all about that. And there's assessments and all kinds of things you can get with it. Check it all out at RamseySolutions.com. Frank is in Sacramento.

Hi, Frank. Welcome to the Ramsey Show. Well, welcome. Thank you for having me. Sure. What's up? Okay, so my wife and I, we have a question in regard to, um, what should we do? So we own a house. Um, we paid three, about three 34 for it. We think we could sell it for like five 80 or more,

uh, because of the market being, uh, you know, hot here in California, we have about a hundred thousand dollars in debt. Um, so we we're curious it's selling the right thing to do we'd have to rent after that um we would have some money left over so i have kind of a two question two part question should i sell a number one and number two if we did sell with the money that's left over after paying everything what would i do with that money because i probably probably wouldn't be able to buy a house for a while. Okay. So you have how much debt now, not counting the house? Yeah, about $100,000. Okay.

How much do you guys make, Frank? $134,000 collectively. Okay. Okay. And what kind of debt is the $100,000? Car and credit card. How much of it's car? $34,000. Okay. So you have $100,000 in credit card. How much of its car? $34,000.

Okay, so you have $100,000 in credit card debt. No, I'm sorry, you have $65,000 in credit card debt. Yeah. Wow. Okay. It says on my screen something about somebody filing bankruptcy. What's going on with that? Oh, my wife had to file bankruptcy for student loans

okay um what kind of student loans because student loans aren't bankruptable well for uh to restructure her private loans and stuff they're private they're private student loans yeah okay and you did are they so she went into chapter 13 correct and how much of the student loan that has um i think about 170 okay your wife's name's on the house i assume right yeah no everything's me on me okay i'm not positive chapter 13 is going to go along with that um you don't have to find out the legalities on it but she probably her marital rights in that house in california are probably going to cause the house proceeds to clear up her debt

and i think i'm probably going to do that anyway um so private student loans who are they owed to um who i'm not sure who her student loans are owed to okay how long how far how She was obviously way behind. Yeah, well, yeah, yes. What's her degree in? She taught psychology. Oh, God. Okay. All right.

So, yeah. So I bought the house, and then part of the debt is, besides the car and everything, always in my name. Yeah, otherwise it would be in the Chapter 13. 100%. Yeah. Her name is not on any of this stuff, or it would have been drugged into the 13. That is correct. Okay.

But you're still, 10 years from today, you're still married. Five years from today, you're still married, and she's still in Chapter 13. And still trying to drag butt out of this thing so you know it's you know you don't have cancer your wife does but guess what you're married to somebody with cancer and guess what that affects everybody in the family um so you can't get away from this now you are one um in sickness and in health for richer for poorer and all that stuff right so it affects everybody even though it's it's somewhat separate but that that thing you did when you walked down the aisle made it not separate anymore even though legally you've got some other weird options here

what would i do if i woke up in your shoes i'm going to try to do the thing that causes me to be the calmest the wealthiest 10 years from today. Not 10 months from today. Not what feels good tomorrow. Not what is embarrassing. Not what your crazy mother-in-law thinks is smart. But what makes me best off my family overall 10 years from today. I'm going to sell the house. I'm going to negotiate with her student loans and try to settle them for like $120,000,

and I'm going to pay off everything and be debt-free. She's no longer in bankruptcy. You don't own a house. You have zero debt, and you're a renter making $134,000 a year. Breathe that piece in. Now that's a place to rebuild from. Okay, that makes sense. But you're going to have to get the $170,000 down

because you don't have enough equity to pay $100,000 plus $170,000. You only got about $250,000 in equity minus your expenses to sell. $34,000 car. Yeah, you could sell your car. That's true. Good call. Right, right. sell your car. That's true. Good call. Right, right. That wouldn't be a bad idea.

But when I finish all these machete chops all over my life here, and this is like hacking at stuff. I mean, we're not using a scalpel here. I mean, this is like chainsaws. Oh, gosh. I mean, this is nasty. You see what I'm doing, right? I mean, we're cutting up here. This is getting it's like a horror movie right so i just want the

chainsaw massacre but i mean if you're gonna go through all of that the point is be done yeah right that's what i'm saying i don't i wouldn't i wouldn't ask you to go through that and then sort of be done i'd want to be clear looking at the rearview mirror and all the crap and start again and you know in a, when I went through a Chapter 7 bankruptcy and lost everything and had to start completely over with zero, and I was actually still in debt because I still had a stupid IRS debt because you can't get rid of them in bankruptcy either, you know, that's what I had. I had almost a clean break and the opportunity to start over at 28 years old

and started over from there. So that's what I'm wishing for you is that I remember how it felt to have a lot of crap in my life, but it's all in the rearview mirror. It feels a lot better when it's all in the rearview mirror. And that's what I want for you. So, yeah, I would sell the house if I can negotiate with the creditors. Now, you need to know that the student loans cannot talk to her. They have an injunction to stay while she's in bankruptcy. It's illegal for them to talk to her.

So her attorney, her bankruptcy attorney that filed Chapter 13, is going to have to do the negotiation for you. But he can contact them and say they're willing to sell their house and settle this, lump sum, cash on the barrel head but it's gonna you know you're gonna have to clear this 170 for 100 and offer them 100 grand on the 170 and then start from there because here's what i know and i know they know it you don't know this 78 of the chapter 13s fail and go into a chapter 7 The private student loans are bankruptable. When the Chapter 13 fails 8 out of 10 times, they get zero.

I know this. They know this. Yeah. So they know that you are a zero looking for a place to happen. So $100,000 sounds really sweet. In Chapter 13, what's the time period? Five years. 60 months. I wonder how long they were in it

for how long it's been not long i'm just sensing the storyline but for sure for sure no but um yeah i yeah but i so frank y'all got a a lot of pain and a lot of mess and a lot of regret and a lot of things you wish you could do over if you can clean house literally and be done chop chop big big swooping swings of the machete and be done like if you sell these student loans for 100 clear off 100 worth of other and be a renter making 134 you're probably going to see your income come up in the following 12 months because you have less stress for the first time in your life you can actually concentrate on each other and on work instead of on payments because she's had this hanging over her head

this 170 000 she's been carrying around for years the weight of it physically is unbelievable your body is going to change you're going to stand up a little straighter your shoulders will go back a little further um the way you walk and talk will be different yeah dr john delaney we talked about this in one of the events about when you owe money when you're in debt and the deeper you are the more you probably feel it is that your body there's this sense of of urgency and fear because you're not safe you're not safe you're not safe and you don't sleep as well i mean all this starts happening like literally the physiological parts of your body. So clearing all of that, there's a sense of peace that you'll get, Frank. And there'll be a lot through all of this.

But, oh, so worth it. So worth it. And then go make you some money and rebuild from there. You're going to be okay. Hey, hang on. We're going to put you through Financial Peace University as our gift to be a part of you starting over. We want to help you, brother. Thank you for calling. Call again if we can help. Dave here. You can find all of our shows with the Ramsey Network app on your smartphone. It's the only place to listen to the entire back catalog of episodes.

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