$100,000 In Debt Only Making $35,000!

Adam is in Ohio hey Adam welcome to the Dave Ramsey show hey Dave how are you doing better than I deserve what's up so I'll try to be quick for you of course my wife and I have four children she is a stay-at-home mom I make about 32 to 35 thousand a year together we have about a hundred thousand in debt we are kind of new to the grantee thing so we're trying to got the money the app and all that we're going through most of the debt is mine I have about eighty thousand of the debt with thirty thousand of it being student loans thirty of your Navy is student rooms yes okay what is the other fifty um I co-signed for a car when I was 18 and that's 20 thousand and the car got repoed and I have some stuff for school that wasn't covered by student loans some medical things and just kind of like all small things add up I have no credit cards whatsoever some other small things add up to $30,000 well with the the cars 20,000 of it yeah I owe another Iowa College 14,000 and then I owe some like two different medical bills that come up to ten thousand and then another five thousand is to another school so okay and what's your degree in um I did not get to finish due to having kids so I want to go back but now I want to be able to like pay for it instead of taking out more student loans okay what were you studying um eyes biology I am about a year away like if I went back now I may have to do longer just because of the time frame but I had about a year left to get my biology degree I got you how old are you I'm 27 okay and what's the other 20,000 that your wife had um she has about oh she has 20,000 as student loans also then get to finish her degree and 2,000 is medical okay all right okay and your questions what um we know that it's a big no-no in you so I I kind of feel like I know the answer but I was debating if I should file bankruptcy due to the massive amount of my loan and then the fact I only make thirty to thirty five thousand because one of the debts that I owe are attempting garnishment and it'll take 25% of my take-home pay which would be a lot for my family who's attempting garnishment I'm one of the universities that I owe about fourteen thousand okay yeah all right I'll tell you what well it's not a big no-no in the sense of like I'm mad at you or something it's just a matter of what does it do any good number one and then number two I always put bankruptcy and divorce in the same bucket you try everything you can try to keep from doing it anything you can do to avoid it we avoid it and then sometimes good people face that I went through a bank run you know and I I'm not proud of that and I wouldn't recommend it I've got a friend went through a divorce he's not proud of that but he wouldn't recommend it but he survived it and there's life the other side of it but it's a it's a life altering occurrence you know and so we want to look at it and analyze it and say what is anything we can do to avoid it you got a pretty pretty big mess here for sure no question about that can you hold with me through the break and let's break it down a little bit on the other side of the commercials absolutely thank you I'll be right back with you talking with Adam in Ohio $32,000 income for kids 120 mm mortars in death 30 and student loans on him 20 on his wife that's 50 of the 120 20 in a repo 14 at a college that's coming after them with a garnishment tenants from medical 5 and another school alone and so on - and another medical a lot of stuff piling up and not much income and it's been a while and he's been getting beat up wondering wondering if he needs to file bankruptcy is that a fair summary of what you told me so far sir yeah it is it's a hundred K total though not 120 X I'm not happy with the hundred I don't want to add oh I must have added it wrong okay all right well the oh yeah you said eighty was yours that's right I didn't yeah okay either way it's it's overwhelming alive or what yeah and the garnishment coming etch is what's prompting this so here's the thing if you file bankruptcy you're still going to have the $50,000 in student loan debt yeah it survives the bankruptcy so we're filing bankruptcy on about $60,000 and it gets rid of the garnishment and you probably there's what's called a means test when you go into file bankruptcy and if you make too much money your income indicates you can pay your debts then they put you into a chapter 13 which is a payment plan not a chapter 7 I think you'll pass that means test looking at this and you probably will qualify for a chapter 7 which would wipe everything else off except those two student loans so that's what bankruptcy would do for you and obviously that would be a relief the thing I always want to look at and I want to make sure you're looking at and help you with is two things when I filed bankruptcy the attorney was a character but he did say a couple of things that were wise one of them he said make sure you protect your marriage because financial stress will destroy your marriage and that no kiddin we were about to kill each other at that moment he I guess he saw the black eye sure and it given me I don't know but the second thing he said was bankruptcy does not create an income and what you've had is a long career a long period of time where you've been stuck on your career your career sucks and it's not getting better when I'm trying to say yeah and bankruptcy is not going to solve that you're still going to be sitting there with $50,000 in debt for kids at $32,000 a year you're still slightly above the poverty level at that point right so it's not it's still gonna be a mess so bankruptcies not really it's gonna help but it's not gonna solve everything so versus like as an example the stupid college may force you into it because you may have to do it to protect your income to feed your kids you can't lose 25 percent of $32,000 to a garnishment no I'm like no no you can't you can't feed your family keep your lights on than that so they may force you into it if they do that you mean you may mathematically not be left with any options I hope that is not the case yeah but what's your overall problem when we solve your overall problems when we solve your career problem you have an income problem agreed yeah the sad thing is is for my area I'm actually feeling pretty close no you're not the only other jobs no you're not it sucks you're not doing good at all I mean you're starving to death man it's not that you're a bad person or you don't work hard that's not what I'm saying you're not making money I mean if you live in an area where 32,000 is a high income it's time to move yeah yeah where do you live Toledo Ohio the only other place that's going to get me more money than that right now is factories are going and finishing out my degree or starting a business Toledo Ohio has a lot of successful business people Toledo Ohio has contractors that make money Toledo Ohio has AI people that make money Toledo Ohio is people who design websites Toledo Ohio is not a depressed market where the average income is $32,000 that's just not true man you're stuck right now and you're you've had the crap beat out of you so I'm being your coach at halftime when you're behind and I'm saying you got more in you than you realize and I'm trying to say let's go play the second half better I think we've got a no we've got to work on your income regardless of if you file bankruptcy or not you've got to double your income in the next three or four years and it's not necessarily going back to school it's just a better choice of where you're working and what you're doing because but you've been doing this for like five years right yeah yeah it's not getting any better so that that's what I would tell you I hope you can avoid the bankruptcy because here's the thing let's just pretend for a second let's just dream for a second then you can start making 60,000 and you could pick up a side hustle and your wife picked up a side hustle and made another ten that adds 20 to this now we're at 80 people do this counting all the time you heard them doing the debt free screams okay I don't know if you're cutting glass or blowing leaves I don't know if you're making websites I don't know if you're cutting hair I don't know what we're doing let's just pretend though let's just pretend that was possible because it is if you did all of that I sudden you guys are so used to living on nothing for five years you've been living on nothing if I had $50,000 a year coming in extra above what you got coming in now I can solve this entire thing in under two years and you're not bankrupt you see right so I mean you could pay a hundred percent these bills and you could by the way you could settle these old medical bills you can settle the other old school that you probably sell this 14,000 for 50 cents on the dollar or 25 cents on the dollar if you had a little cash to throw at them if you offered them three or four thousand bucks today they'd probably take it but you don't have three or four thousand bucks getting that yeah yeah that's the problem so and you probably don't have anything you could sell because you guys have been living hand-to-mouth and again I'm not shaming you I'm not saying you're a bad guy at all you don't hear that okay all I'm saying is you got more potential than you've been getting out of this and the math is not going to get easier until we get the income side of this equation up so that's where we want to help you if we can and if you can get some more income coming in you can say you can probably settle that repo for easily 20 cents on the dollar so four grand will settle that you can settle those medicals for probably 20 cents on the dollar they're five years old probably settle these couple school lunch and I gonna sell the student loans themselves out like that but all sudden this 100,000 starts turning into about 50 or 60 or 80 thousand bucks on settlements with lump sums and now you got some cash to throw at it because we've changed your income but changing your income is the part of the math equation we have to have to do to make that a possibility so that's what I'm hopeful for for you and Ken Coleman is our career guy here at Ramsey I'm going to send you a copy of his book the proximity principle and I want you and your wife to put the kids to bed it to bed early tonight turn off everything in the house get a little cup of hot chocolate and sit and dream again like you used to when you're 17 or 18 of what you want to be when you grow up that pays seventy thousand dollars a year or a hundred and seventy thousand dollars a year and what are the steps to get there and don't tell me you got to go back and get a hundred thousand dollar loan to get a student loan to go to school to get there you don't so what are what are the steps to go be what you want to be three years from now two years from now making much much more money for you and your family that's what's going to be necessary here for you because if you live this way for the next 20 years you're gonna struggle you're going to struggle and I don't want that for you man so hold on Kelly's gonna pick up we're gonna give you a copy of ken Coleman's book the proximity principle Kelly also throw in a book called start for him out of our library and one of them that we published awhile back start because this he needs to start fresh this is a fresh start thing we reboot this thing reboot this computer cold restart well my computer's not working I don't know how to fix it because I'm horrible with computers but I know cold restart turning completely off turn it back on solves a whole lot of problems takes a few minutes this always solves a lot of the problems and that's true of a lot of things in life a man you called me back if I can help more I hope you're not forced into this bankruptcy let's see if we can fight our way through it but dreaming again

Channel: The Ramsey Show - Highlights

Views: 858,794

Rating: 4.8601232 out of 5

Keywords: the dave ramsey show, budget money debt cash, real estate, insurance, how to make money, dave ramsey, save, credit card, compound interest, buying house, buy, snowball, money, debt, student loans, debt free, student loan debt, personal finance, how to pay off debt, budget, loans

Id: 036hkIRFCTw

Length: 13min 4sec (784 seconds)

Published: Mon Dec 23 2019