$1,000,000 Of Debt On A Failed Vending Machine

Brought to you by the Everydollar App. Start budgeting for free today. So about three years ago my husband left his stable job to start his own vending machine business and since then he's racked up about a million dollars in debt. He's run out of money to run the business. Personally I don't feel like he's worked very hard to make it work. He recently just went back to work to try and give us an income because mine's the only one. I just started vending machine business that he spent a million dollars on is not making money. Why? Correct. Well um I think he tried to buy too many too fast and he followed the Robert Kiyosaki way and kept telling me you got to get into debt to make money which I strongly disagreed with but um he kind of just kept going anyway. So I guess at this point I just don't know if I should we should be pursuing bankruptcy. That's what he wants to do. Personally I feel like the bible's very clear on paying back our debts but at the same time the business was probably only worth $450,000 so that would leave us with about $500,000 a day. Who is the million dollars who's the million dollars owed to? Some of it's business. A lot of it is personal credit cards, HELOCs. He took out a couple of mortgages on our house. We don't have any equity in our home anymore. A house? There's a rental house? We did have a rental house we just sold one. We have another one but it's not selling. That one's only worth about $60,000 so. And how long has this been going on Emily? Three years? A few years yeah. Okay and you're done. I hear it in your voice. You're I'm pretty pissed. I'm very done yeah. Because you and you've had to go back to work. Do you guys have kids? We have four. How old are they? 13, 12, 10 and 6. All right. I'm sorry. So there's nothing left to sell against the million that's still outstanding? You could try and sell some. He has some micromarkets and he has vending machines but what he would sell it for would be a huge loss. I mean selling the whole the business as a whole the most would be like $450,000 to $500,000 is what he's being told. So then you'd have half a million. And there's how much is there still a million owed? Right now all together with all the debt yeah we owe just under a million dollars right now. He hasn't sold it yet. He has two people running it but it's not making money. He doesn't have enough money to like fill inventory. Okay so if he sold it for $450,000 what who would that pay off? When you take your vehicle to the shop you want to know it will get fixed right. Christian Brothers Automotives digital vehicle inspections give you confidence because you see exactly what their technicians see and every repair is backed by their nice difference warranty. Three years or 36,000 miles. Schedule your service today and get 10% off your visit at cbac.com slash ramsey or click the link in the description. 10% off up to a $250 value. See store for details. If he sold it for $450,000 what who would that pay off? I guess it would depend on who we want to pay off. Okay so the vending machines don't have a lien against them the business doesn't have a lien against it. Well he he leases some of micromarkets and he rents to own some of the vending machines. Some of the vending machines he does own outright but most of it is in debt. Okay I'm trying to figure out what the $450,000 would be used to pay off. Would it go to HELOCs or credit cards? Would that clear all of those rent to own machines and all that or does that actually get to clean up some of your house debt? He wants to put any of it. I didn't ask what he wanted I mean what there's is the money gonna be have to be used to clean up these machines in order for the thing to be marketable? Yes yes. Yeah so you're gonna have to put it towards the machine. Yeah so you've got $450,000 worth of debt on the machines that you would just use that money to clear that debt but so selling it doesn't really net you any cash to pay off like your credit cards or your house it just clears some of the debt that's on the machines. Correct. There's more than $450,000 on the machines right? Yes. Okay and then then you have your house and you have credit cards and you have a HELOC right and a $60,000 rental. Now yeah okay it's not being rented no it's vacant we were trying to sell it and it's just sitting there right now. So there's so much going on here. You guys have no money Emily right? None in retirement or? There's no cash. He drained our 401k to do it and our personal credit card. Did you know there's no money? Did you know this was going on or would he make decisions and tell you later? We would agree on things and then he would go do whatever he wanted. Eventually I kind of released it over to him and I found out because our credit card got declined and then I checked our bank account. How much do you make at your day job? Right now I'm 25 an hour working 30 hours. And what does he make at his day job? He just started last week and it's 21 an hour base and he's trying to sell insurance with Allstate. Well if you were to file chapter 7 bankruptcy you would have to re-sign on all the debt that is on your home including any HELOCs or anything else. That doesn't go away or you lose the home one of the two. Yeah how much is all that Emily? The HELOC on the home? It's like $450,000 and I think our home is probably worth a little under that. So the bulk of that second part of the debt is the home. Wait a minute let me back up. So if you sold your home and sold the business you would clear up $900,000 of the million? Well no because we wouldn't we wouldn't I'm sorry so we owe about $450,000 on our house right now. Is that part of the million? No the HELOC is which is like another $200,000. The personal like mortgage is probably $250,000 right now. Okay all right so it would clean up $200,000 of the million. $450,000 would be cleaned up when he sells the business so that's $650,000 is cleared which would leave you about $350,000 in other debt if you sold your house and sold yeah credit card and business debt. And the business debt when you say business debt what is that? Like business loans he's taken out. Okay well they're signed personally so they're not business loans they're just personal loans he used to buy vending machines with. Now if you sold the business for $450,000 are there any machines that are not included in that package? No he would all of them. That would be done. Okay so what I'm trying to do is work through if we if we cleaned house because in a chapter 7 you're going to clean house anyway and then if the other the other $300,000 or whatever gets wiped out if he files bankruptcy. So usually when I'm getting into these things bankruptcy doesn't do as much for you as you think it does because if you sold the business and sold the house we've not got a lot left to do and that that can be negotiated that debt can be negotiated down for pennies on the dollar versus filing bankruptcy. So it's possible mathematically legally you could probably work your way through this. I don't know but I think you could. Okay just based on what I've heard I'm trying to get figured all out there's a lot of moving parts. I gotta tell you I'm about having been through this only I was 28 years old and I was the stupid husband. Okay I was him I didn't lie but I just did stupid stuff I just went deeply in debt and lost everything on real estate wasn't vending machines but same thing and I'm more concerned about him being depressed or suicidal and I'm more concerned about your marriage than I am about any of this money and you're you're rightfully so very disgusted right now but if I were gonna coach you guys I would coach him on throwing his shoulders back and building out chapter two of your old life and I would coach you guys on sitting down with your pastor with a good marriage counselor and try to work your way through this where he repents of the stupidity and he begins a process to rebuild trust with his wife and relationship with his wife because you are very disgusted right now and you should be yeah you should be but money fights money problems take marriages number one reason for male suicide is financial issues so there's big so I want to take care of you too yeah 90% of this discussion and 10% bankruptcy or not who cares create your free every dollar budget today the simplest way to budget for your life