$7,000,000 of Debt in 60 Minutes | The Best of the Ramsey Show

I'm calling because we had filed bankruptcy back in 2019. Um, things happen. We thought we were ready to buy a house and now we are back in debt again for a sum of about $118,000, not including my mortgage. Um, so I know that there's an issue. I admit that. I don't know where to go from here because there's a lot of things that I've done that my husband's not aware of. And I just want to get out of this cycle because I'm done. That's gotta be kind of scary. It's very scary. So, um, what is it you've done? Your husband doesn't know about, I've opened my credit cards. I have a total of like 18 credit cards. I have a total of what are you doing with them? If I can be completely honest and vulnerable. Um, when we bought this house, I thought that I needed new things. I, we are the poster child of trying to impress people. Um, and wanting to have nice things and do nice things. And we put on this front, like we have all of this money and would it be okay to say that that's you? Not we, yeah, that's a you. Um, it's, I will say it's both of us. He just doesn't know. He thinks because I make a lot of money that we just have, he's not involved in the finances at all. Not, he doesn't even have access. So the reason he doesn't know about it is just because of his lack of involvement, not because you've actively deceived him. Fair. Yes. That's exactly it. Okay. What do you make? I make $125,000 a year by myself. He makes $35,000 a year and I make an additional 15,000 with my side hustle. Okay. And, um, what's your home worth? My home is worth about $225,000. And what's all this debt on credit cards? I have, so I have on the, I owe $1,300 to the IRF. I have $9,500 of pay over times, like paying for like PayPal and Corona. I have $16,000 in like online loans, like prosper. Um, we have a $40,000 car loan and then 45,500 is credit card. And you guys are 55. I'm 40. I'll be actually my birthday's in a couple of weeks. I'll be 43 and he'll be, um, 45. Um, well, the first thing I would tell you, and John can elaborate is that you're not going to be free or heal by yourself. This idea that you're going to carry all the weight of this financial family and make all the decisions is unwise and it's not working. Agreed. And so we need two things, uh, relationally one, as you go to him and say, honey, we're in a mess again, because I didn't say no and you weren't involved. So I've got to have you and me working together from this point forward for the rest of our lives, where both of us know every single thing, every single month period, we're going to do a budget together and we're going to take this $175,000 income and we're going to clean up this new mess that we've made since bankruptcy. Okay. Cause basically you filed bankruptcy and didn't change a single habit. No, not at all. And you need your need to impress other people with money. You don't have that. You don't even really like continued. That is correct. And so we relapse is what amounts to, so that's got to stop this need for affirmation from others. One of the things we found with wealthy people is that one of the keys to them becoming wealthy as they reach a point, they don't give a crap what anybody thinks. And you give way too many craps. What do people think? I do. You said that you said that it comes from my childhood. Like, Oh, it comes from all of our childhood. We all need affirmation. We all need a pat on the head, right? But you're, you're too dead, gum, old and rich income wise to act like the, a 14 year old girl that needs affirmation. Time to be a grown woman and stuff. And can I ask one more question with that? Because I know that this is wrong. Um, my husband has worked at the same job for like 22 years. He's not leaving. And he's made it very clear, but he only makes 1675 an hour. And so part of me, again, I know this is wrong. I get angry with him and sometimes tend to blame things on him. Like, what's your fault? You're not doing your part. So I feel like I do this because I do what I have to do. How can I get over that? I know that that is not right. And I just separate issue. You're, you're looking to, you're looking to blame. Don't do that. You, you, you've lost respect for him a long time ago. And if you lost respect over him over a dollar amount, that's something you got to mind your soul over and y'all need to get into, y'all need to go get into a marriage counselor cause that's a mess. Okay. The, I want to, I want to double click on what Dave said. Anytime you have a behavior that you need to change that's resulting from something out there that you're afraid of, you're afraid of what people are going to think. The only way to heal is straight through it. I had a season when I drove a used Corolla. Dave has a great story about the, it is a used car after bankruptcy. I want you to start selling stuff. Yeah. This car has got to go. The car has got to go. Everything's got to go. And I want you to practice not having nice stuff and have people see you and you're going to find out you're not, you're not going to die. And this is the path towards not giving a crap. This is the path to freedom. But you gotta, you gotta practice it and go right through it. Sell everything, everything not tied down. So the two of you are going to do a budget every month with every dollar on paper. We both look at it. We both understand it. We both agree what the money's going to go before it goes for the rest of your life. That's your antidote. And what comes with that is cleanliness, meaning you'd have to sit down and start with, Oh crap, here we are. So you're saying, Hey, here's what's going on. And you cannot bring up his income as part of this conversation. His income is not the reason you bought crap for the spare bedroom. Right. Okay. Um, for that corner, for God's sakes. Yeah. I'm here to tell anybody who does that, that is the worst thing to do. I'm the poster child of, you think that you have enough money and you make it and you can make the payments until you live on beans and rice. You don't go out to eat. You cancel any vacations. And the two of you roll up your sleeves and sell everything in sight. And you have $175,000 of your income to clean up a hundred thousand dollars in debt. It's going to take you 18 months of scorched earth living where your broke friends are going to think you joined a cult and that's just fine. You need some radical, dramatic, traumatic changes to swing the pendulum all the way to the other side for a while. My husband and I, we owe the IRS and the state over $600,000 in debt. Um, how did that happen? Yes. You know, it's quite, it's overwhelming to even think about how it happened. Um, just not paying our taxes. And my husband is self-employed for quite a few. Um, I'm actually not even sure on the date how far back it goes. Um, so you finally started filing and then you end up with, try to stay out of jail because not finding, not filing is criminal. And so you go and file and now they give you the total and it's like, Oh my gosh. Yep. Wow. And obviously you don't have 600,000 or you wouldn't have called me. No, that's right. Um, and we are current on our taxes right now. Good. Um, we were working with a tax resolution company who eventually just told us after, you know, you have to pay them after you gave them 10 grand. They did nothing. Yeah. They're there. Yeah. There's helpfulism anyway. Uh, negative. Okay. Yeah. I'm sorry. Uh, so what did you all, what, what is your house worth? Uh, we, um, about $400,000 in equity. Yes. And there's a lien against it. So from the IRS or somebody else from the IRS. Okay, good. And, um, what is your household income? Um, 244,000 after taxes. That's good news. Okay. Yeah. So the tax resolution company that we were working with after everything was said and done, they basically said, um, filing chapter 13 would be in your best interest. Yeah, they, they are not, they're not credible because they shouldn't have taken your $10,000 because you are not a candidate for an OIS and offer and compromise and OIC and they took your money. Thank you. Telling you. And I can tell you in 30 seconds, you're not eligible for that. Yep. And offer and compromise is only available to people who don't have any ability to pay. You have tremendous ability to pay between your equity and your income. So the IRS would look at that in about 13 seconds and say denied. So those people just stole $10,000 of your money. So they're not credible. A chapter 13 will put you on a payment plan. You probably can get a good tax attorney and just get on a payment plan. Okay. Uh, you need to get somebody that's a pro, an attorney that works on taxes. That's legitimate. That's not just selling. Oh, I sees 1% of the people that apply for an OIC, by the way, folks, these things, you see them on, uh, you see these commercials on television. Have you got a tax problem? Call 1-800-TAX-R-US. We have professional IRS age, former IRS agents to help you. That's the ad she answered. Okay. And, uh, it's an OIC and offering compromise in order to qualify for that. You have to basically be completely zero net worth and almost no income ability. So 1% of them go through folks. So that those things are scams. Now that's not to pick on you, Hannah, you just got taken advantage of, I'm sorry, and you're scared to death. So, but a good attorney that has a tax practice, I have an attorney on, on retainer that represents us on tax issues. And I have a CPA firm that represents us on tax issues, not because of this kind of issue, but because right now the bozos owe me a bunch of money that they haven't paid me back on a refile. We did. So I'm having a fight with them and I have to have some professional counsel to do that. That's what you need is somebody that's several hundred dollars an hour. To retain, and they will tell you, and they will call and represent you and work with the IRS and get a system in place. A chapter 13 is a series of 60 payments over five years, obviously one a month. And it does not reduce the tax bill and it does not reduce the interest with the IRS. You're going to pay the whole stinking thing anyway. So if you can negotiate that without bankrupting, which you can, you would and I think you can do it faster than that. Here's a sensitive question. You ready for a hard one? Yeah. Have you all talked about the fact that not paying your taxes has cost you your home yet? Oh yeah. Okay. Yep. So if I'm you, I want the IRS out of my life worse than almost anything. If I'm you and I'd sell that house and put 400 K on it. Now you make 200 K now you make 200 K and you owe 200 K and you can plow through that in a couple of years. Okay. You'll have your life back in two years. Okay. That's going to, we don't have to file for bankruptcy. You're not bankrupt. You're not bankrupt because they've already done about all they're going to do, they slapped a lien on the house. They may come after some bank accounts or something too, because this is such a large amount, but they won't. If you're in active negotiations with them for a payment plan through an attorney, they're there, they, they, they have a sense of a decorum about them. They can, but I've never seen them do it in 35 years of doing what I do. Go after somebody that's in the middle of a negotiation with a good tax attorney. Okay. Now, do you know how to find one? Cause I'm not positive. I know how to tell you other than if you're doing business at that size, you probably have some people in the legal community you're already working with, call them and say, who's the best tax attorney in town. That's very smart. And, uh, a little mean. Okay. That's what you need. Hey, and they'll, they'll put you up. So, so if you start making a $8,000 a month payments and you throw 400 K at this, you'll be done in two years. You understand? Yes. And you'll get your life back. How long have you been living in this terror? Ooh, it's been a while. What's a while. Um, about five, four or five years. It needs to be over done. Yes. Emotionally. It's emotionally not sustainable. It's trauma, isn't it? No, it's very draining. Yeah, I know. I owed them a whole 38,000 when I went bankrupt in my twenties and it felt the same way you feel because they have so much power, all the other creditors, I could put a noose around them and deal with them with the bankruptcy I went through, but, uh, student loans and IRS and child support and alimony are not bankruptable. They, you can put them in a 13, but a chapter seven to wipe them clean is what you've got to do there. And you're not going to do that either. It doesn't work. So yeah, you can get through this, but this lack of, uh, business excellence, lack of diligence, um, I'll blame your husband on both of you for not getting your taxes filed. It costs you your house and you can look back and go, man, I learned a tough lesson. You'll get you another house someday. You make several hundred thousand a year. And John, I did the whole segment and you didn't say a peep. Hey, there's sometimes I just need to be quiet and listen and learn, man. That's, that's heartbreaking. Wow. But Hey, she's got a path. She has a path. It's called hope. That's right. And do it because you've been living in the crap so long. You're going crazy. If you don't, that's right. You got to get clear of it. My husband, he's a business owner and frankly, the business is tanking and, um, he's racked up a lot of debt on both personal cards and, um, business cards. And between that and his truck and trailer, we got a little over 90 K in debt that we're looking at. Um, we have a home that we own. We owe about one 75 still on it. And it's, and we have about a 4% interest rate, um, or estimates are saying that our home is worth about two 50 if we tried to sell it. So I was just going to see if you would advise us selling a home and going into a smaller place or hanging on to it. What do you make? Nothing. I'm a stay at home mom. What's he going to do? Um, he's looking at just getting a local job here, possibly electrician apprenticeship. But I mean, we'd be making hardly anything and he's not gotten a paycheck from work and probably three months. How are you eating? Um, we have, we had a stocked pantry that we've been working our way through and there's a food pantry locally that we've been, you know, going through and wick, um, we had a last month, but I don't know if we're going to this month. Okay. Um, yeah, I've got about $25 in your checking account. Yeah. So why would he take a half buck job making nothing? Um, our area is just, there's not a lot we've looked. Um, he's very skilled. He's works in construction, but even with that, he'd be lucky to get a $30 an hour job. Um, why? You know, Oregon is not like not doing construction. There's construction all over the place around you. There is. Yes. Um, and he can maybe try and get on two crews, but just hours for that, you know, most crews aren't the same hour, you know, they would both be day 10, 10, but an apprentice electrician is not going to make anything. You said that. So why would he even consider that? Go get on three different crews and work like a maniac. You have $25 and your wife scared out of her mind. You're about to not have electricity. There's a Walmart in Eugene. Isn't there? Yes. Can he go throw boxes on the night shift? Like you got two guys here who've got wives and kids, and I can't fathom the situation you're in right now doing anything is not an option. Right. And I'm going to invest in my future by becoming an apprentice and starve to death. No, thank you. No. Okay. We need money. Just trying to think of a new career to start now. Y'all are money. Y'all are drowning. That's like trying to think of a new boat when yours is sinking. Like the first job is to get to shore. Sure. Okay. So I want him to go get three jobs in construction and Walmart box slinging today. I want him starting right now. Okay. The truck and the trailer bull crap construction stuff right there. What in the world, what is that stuff worth? Um, the truck, he owes about 14 still. And I looked on Kelly blue book and it's probably worth about six. If we're lucky, he's kind of run it to the grounds with working it. Yeah. What's the trailer worth? Um, I haven't looked at what it's worth. We bought it for 17,000. Um, and it's a 2024, so it was brand new. Um, but I don't know what it would go for now. Okay. Let's get rid of that. And it doesn't sound like you're stuck in the truck for right now. And let's get six jobs. And here's what I, here's what I want you to do. Okay. I'm going to put you on hold. Team is going to pick up and we're going to put you with one of our financial coaches and now he has to go get three jobs this week. Okay. Now, can I ask you about that? Yeah. With his business, he has a couple open jobs that he hasn't finished. We'll finish him on the weekend. Okay. That's what you've talked about doing. We got $25. Yeah. Rachel, how many kids do you have at home? Uh, three with a fourth on the way. I thought so. Okay. Yeah. Okay. So, uh, honestly, I don't want him to let those other customers down, but I'm more concerned that he doesn't let his pregnant wife down. Yeah. Okay. Where you are is terrifying. My wife Sharon will tell you that when she was in the exact same position, she felt like she was driving down the interstate and hit a patch of ice and the car was spinning and she was getting ready to hit the crud out of something. She just didn't know what it was. You know, that kind of terror where you open your mouth to scream and nothing comes out. Yeah, that's where you're sitting kiddo. Yeah. And so you guys, and the only answer to it is extreme activity on his part. So I want him working three things and he can, he can put off working weekends until he, uh, at the new jobs until he gets these jobs wrapped up, but he needs to get them wrapped up and wrapped up now. And I want him to see how much money he can make. Well, I don't want to overwork. I might burn out. You're not going to burn out right before you die. You will pass out. Yeah. He's been working 60 to 80 hour weeks the last three months, but making no money. Right. Yeah. So that that's the issue. So we need some money short term. This is survival. Now, once we got you with a coach and the counselor, here's what we're going to do. The first money that comes in, let me tell you what you buy with it. You ready? Yep. Food period. Not eating out food, grocery store food. You're at home with kids. You cook fresh vegetables, fresh meat, homemade everything you cook. Okay. Food lights and water. Second, keep your utilities on. Are you rent? You own the house, pay your mortgage. Third, pay the truck payment. Fourth. Okay. And I don't care about anybody else until your family is warm and housed and fed. Okay. He can make that much money by the end of next week. Okay. Yeah. You follow me? So we'll get the wolf away from the door and the terror and the panic. And then we can start to think about long distant future. But right now we've got to take care of our own household first. Okay. That's biblical. Yes, for sure. Take care of your own household. Yes. And the idea of possibly selling the home to gain the equity. You may have to do that later, but I don't think you do. I don't think you have a home problem. Or even a trailer or a truck problem. I think you've had an income problem for some time and it's compounded and fell in on itself. If we reverse that trend and create a huge income with a ridiculous number of well-paid hours, then we can flip this thing on its head pretty quick. I don't think you're going to have to sell it, but it all depends on how much money he can go make. Okay. Is that okay? Thank you. Yes. Listen, we're not charging you for this coach. We're going to pay for it. I've been right where you are. I remember what it feels like to be so scared. You can't breathe. Yeah. Okay. And kiddo, listen, last thing is this. Your husband is a good guy. He's a good dad and he's a hardworking dude. His business just failed. That doesn't mean he's a bad guy and he doesn't feel real studly right now. When his business is failing, it takes away some of your manhood. You follow me? Yeah. So you remind him, you married him for him, not for his truck and trailer. Okay. And he married you, you married him because you knew he was going to take care of you and he is. He'll go do it. He'll go do exactly what I told him to do. This guy's not a bad dude. How old is he? 26. Uh, 24. Yeah. Okay. Almost like I've done this before. Honey, you're going to be okay. We're going to walk with you. Okay. All right. You hang on. They'll pick up and get you set up. Dave, what is the, what's, what is the, this is a world. I don't know that you've lived in. What's the moment when, especially in this case, a man with a dream calls it. Cause I can't imagine working 68 hours a week and my wife's going to a food kitchen. We always call it too late. Yeah. Because we always hang on that much longer. Yeah. And then, and sometimes it's too late to turn it or salvage anything. Um, so he should have been out of business six months ago. Right. Cause it wasn't working now. And we know that because of the debt he's racked up, not earning money. So we, we know he's been supporting this habit called a small business. So this dream, but your dream becomes a nightmare. And those of us that are entrepreneurs, uh, we hang on five months, four months, three months, too long, almost always. And then you got a scared wife saying about the cut the lights off. Yeah. Sharon would have left, but she didn't have a car. That's exactly. I am a stay at home mom. Love two young kids. And my husband is a business owner. Uh, I've been living with my head in the sand for the last couple of years as he's managed the money. And I've just recently discovered how poorly he's been doing that. Uh, we are in a world of debt right now and trying to find a path out of it. Okay. So what, what caused you to suddenly become aware? He called me one day and said, I'm going to tell you before you get home to see the mail today, but we got a foreclosure notice on our house, which was due to a second mortgage he took out on our house in order to purchase a warehouse or his business. Um, I naively thought, okay, I'm going to fix this. I'm going to cash out one of my 401ks, pay that off, get the house out of foreclosure, and then we're going to move forward and do everything right from here on out. Uh, that was very naive. As I started to dig deeper, I realized. Um, the trouble that the business was in, he has a huge overhead and is not making enough to sustain that. I'm 39. He's 42. How long have you been married? Six years. When was the phone call on the foreclosure notice to you? Well, on the house or on, when did he call you? What day, how long ago did he call you and say, oh, this was, this was back in May, May. Okay. So you've been, you've been gathering more information and you all have been having more discussions for a couple of months now. Correct. Okay. All right. So, um, what is he now saying? He is, he has a very motivated mindset and he feels like he just needs to keep pushing forward with the business and things are going to turn around any day, any week, and he's going to be able to fix all of this. Meanwhile, it feels as if, um, things are not getting better. Things seem to be getting worse twice this month. He's not been able to make payroll for the employees. Um, I've found out about some IRS that some property tax that's delinquent. Um, so why are you, once you discovered one thing, why does, why do you not have a conversation when the two of you sit down and he tells you everything? Why are you having to continue to pull the thread on the sweater? Well, eventually he did. Once I found out about that, we're all on the same page today. What's the total debt, Katie? Uh, including mortgages. Yeah, sure. Yeah. About 4.5 million. Okay. And how much is the mortgage on your home? Um, our mortgage is we owe 480 on the house plus the additional, the second mortgage, which is 400. So about eight 80, what's the house worth? Probably 1.1. Okay. What's the, uh, mortgage on the warehouse? Is there one, uh, the mortgage on the way? Yes, there is the mortgage on the warehouse. We owe about 3.3 on it. Um, and the monthly payment on that is about 26,000. And what's it worth? It's worth 4.1, 4.2. Okay. Is it on the market for sale? Yes. I sat down with our broker. So that's on the market. Is your home on the market for sale? No. Okay. And, um, so what other debt is there other than these two? Uh, there's credit card debt, which totals about 120,000. There's a personal loan from my parents, which is 115,000. There is the property tax, which is about a hundred thousand. There are, are ridiculous cars, which are 140,000. Are they on the market for sale? No, they need to be today. Okay. Now is he, the thing about business is this, okay. You do have to be an optimist to operate a business and operate a business in California, you have to be an unbelievable optimist with the taxes and the regulations and the crap you all face. Okay. It's unbelievable. So he has to be an optimist or he's dead in the water. So we have to have that category. We can put him in. That's a good thing. Um, but what you need to hear, and I don't know the answer to this is you need to hear him articulate a detailed tactical strategy, a strategy overall, but the tactical implementation of the, what items are we doing to make this thing profitable, because all you're describing to me are signs of death of the business. He has some reason, hopefully logically that there's a reason for life and the business. I don't know what that is. I can't, I'm not hearing his part of that story. It is possible that he's got four things that if those, that if three of the four things levers flip, that he can turn the business around. Okay. But the poor management and continue to go further, further into debt is a pattern of, I think I can out earn my stupidity. And that's what you need to see him stop doing because it's driving you nuts. So the two of you need to sit down and you know, it's okay for you to quote require of him for your peace of mind as his wife, that he show you what the clear path is and exactly what the steps are to get out. Not just if I grip my teeth, it's going to get better because if I grip my teeth and keep doing the same thing, it ain't going to get better. It's going to keep doing the same thing. Yeah. And I think a timeline's appropriate to Katie, because you guys can sit here in this cycle forever and ever, and you need an, you need an end date or I would be like, Hey, I will give you X amount to figure this out. But at some point you got to just stop it and go get a job. Like we have to clean this up. I mean, it's just so Henry cloud says in his book, necessary endings that you end something when you lose logical hope that it is going to get any better. Okay. So when do you close a business? You close a business when you have no reason logically to believe it's going to turn around and you need to see something other than all the death signs. You feel like you're sitting beside the hospice patient hearing all the signs of death coming and you've, and yet it's not a hospice patient. Maybe, maybe it's just a patient that's got the flu, but that's how you're feeling because you don't know what's going on here. I don't know what's going on. I'm selling the warehouse is going to be a big lick. That's going to be really helpful. Getting rid of your cars is really helpful. And, um, you know, we got to get back to scorched earth. We got to get this thing, right. To where we can make payroll and we, and we see a path, a light at the end of the tunnel, that's not an oncoming train. The two of you need to find that together. Uh, and if you don't see it, Katie, you speak up too, because so far the pattern's not been here, IRS stuff. I mean, like it's not looking good. No, he's he has poorly managed it. That's for sure. But if there is a clear path, but otherwise we need to talk about how we're going to sell everything off and shut it down. So you're, you're right on track and trust your gut. You've got good gut instincts on this. I'm 64 years old and I've been working for 46 years. And I have a little different alignment on retirement than my wife does. And I have a lot more debt than I should have for somebody that's made the kind of money I have. And I am trying to figure out how to pay down over $230,000 in debt, uh, in within the next year and possibly get retired by 65. Okay. Where are you going to get $230,000? Well, my income is I, I make a hundred and around $60,000 a year. But the problem is, is my wife's income is around $30,000 a year. And we have 20,000 plus in credit card debt and $12,000 on a, on a car. My mortgage is 118,000. I have a second mortgage at 36,000 and I've been paying down the credit cards, but every time I turn around and look, it's higher than it was six months ago. How'd that happen? Well, not enough boundaries, not enough conversation. Um, I'm, I'm trying to get myself. Have you guys got money saved? Do you have a nest egg? Um, I, I have a 401k with, uh, about 310,000. Um, I have an IRA that's between my Roth and my traditional IRA. It's 425,000. Um, the Roth part portion of that, it's only about 55,000. So you're not, uh, you're not going to retire with 230,000 paid off in one year. You don't have the money and your spending, your household spending is out of control. So even if you did retire debt free, the debt's going to come back. Yeah, I, I'm coming to that realization. You guys can't live on 160,000. How are you going to live on retirement income? What would be your retirement income? Well, probably about half of that. Yeah. You can't live on one 60. You can't live on 80 agreed. Right. Yeah. And the nest egg is not big enough to support retirement. I mean, it's a, it's a good mistake, but it's not a great one. Um, so yeah, I mean, it sounds like you guys have never really addressed the issue and the two of you are going to have to sit down and go, Hey, we're up a Creek here. We've got to cut up these credit cards and we got to get rid of these car debts and we got to get this mess cleaned up or we're going to be working until we're 80. Yeah. And I, I, the only other income I have is I do have an annuity. Why do I think you're not going to do that? Cause you just completely changed directions after I told you what to do. No, I a hundred percent. How long have you been married? Um, 36 years. Now this is a come to Jesus meeting I'm talking about. We're going to sit down and go, this is broken and we are going to fix it starting now. That's the meeting tonight. No televisions on nothing in the background, no dishes being washed while we're talking about it. This is, we are screwed and we have screwed ourselves and we have to fix this now and never go back to the old ways we're going to get on a budget. We're going to open that Ramsey every dollar app and the two of us are going to start acting like grownups. Not like a couple of children in Congress spending money. We don't have, we're going to cut up the credit cards and we're going to clean up his freaking debt so we don't have to work till we're 80 and then you get yourself used to living on $80,000 a year while you pay off all this debt and then when you retire, you can live on $80,000 a year because you've got a couple of adults in the household instead of children and children can be 64 by the way. So, um, that, that's what, I mean, but, but you've, you've kind of think, keep thinking you're going to treat the symptom rather than the problem. And the problem is, is that you guys spend more than you make and you don't have a system and you're not aligned and you're not agreed in your marriage after 36 freaking years on how we're going to do this. And so this is going to run off until you're 90 and you're going to be eating dog food and this is where this is headed. So you've got to go back. You got to go to the source of the problem, which is not her. It's both of you, but it includes her. And so she's going to get to hear a word that you haven't told her in a long time, and here's the word. No, we're not doing that. We are broke people and you have to start acting that way. Or you're going to, you know, this thing's going to fall in on you and that's what you're starting to feel. And there's sense of desperation is creeping up inside of you. The good news is you've got a year, maybe you work two years, maybe you work three years and you clean this up and end up with a half million dollars in your nest egg instead of 300,000 and you got no debt house and everything's paid off in three years because the two of you got very, very serious starting tonight, ready, set, go. I don't know if you're going to do it or not. I keep thinking about that old Dave quote, you work too hard to feel this broke 46 years of a career, making six figures, which is way more than most Americans and you got nothing to show for it. And that breaks my heart because we know retirement is not an age. It's a financial number. And so I wish you could just ding a, Hey, I'm 65 time to retire. Not if the math says you can't. And so that's the hard truth. It's been 36 years of compounded bad decisions. It's going to take a little while to clean this up and you guys need to be unified. My wife and I, uh, we got ourselves in a little bit of a mess. Uh, we're looking at about a million dollars in debt at the moment. On what? Um, well, I just closed down my business, uh, in June. And, um, so we, we had taken out some SBA loans, um, to keep the, um, to keep the business afloat. And, um, then we also have our house, uh, credit cards. Uh, we have IRS, uh, taxes due. Um, and you know, a couple other things. How much is the, um, how much is the SBA? Um, right now I think there's about 250,000 left on them. How much is on the IRS? Uh, it's 350,000. And, um, how much on credit cards? Uh, we actually just entered a consolidation loan and not, we weren't sure if that was the right thing to do or not, but it, it dropped our monthly payments significantly. So right now we're at about a hundred. I think that total payoff was about 96. Okay. And, um, so six, seven, what's the three, the other 300, your mortgage? Uh, 250,000 on the mortgage. Um, we have 8,000 left on a car. And then, um, just, um, repaying, um, uh, our accountants and attorneys, which amounts to what, um, 15,000 for an accountant, eight, 8,000 for an attorney. Um, I'm sorry. The attorney was for what, um, they actually assisted me through my IRS, um, they got me an installment plan for $500 a month, which was great until, um, two months after the installment agreement went through. Um, now, um, now they're saying that, uh, we have to review everything again and that, uh, we will be at least liable for 175,000 to pay in the trust. Oh, I'm sorry. You're liable for 350,000. So how, where's one 75 come in? I'm not sure. The that's what the officer said when I was on the phone with him. An additional one 75. Not an additional that's just includes in the three 50. Okay. So you, you didn't, you didn't hold your nine 41s back. No, we, we never held anything back. Um, we, we just learned they're not going to put that on payments. That's right. I don't, I don't disagree with that. Okay. Um, so what is your home worth? Um, about five 50. And what else do you own? Nothing. Um, right before all this happened, um, we had, um, a rental property. We had land, uh, we sold all those two. Um, uh, we, we actually did a flip and we lost everything on top of that. Um, and then everything kind of just trickled down from that. Um, and then we paid off some credit cards back then as well, which was about four years ago. Um, are you now working doing something else? Yes. What do you make? Uh, just recently I was making, um, two 60, but now I'm making one 40. I got let go from one, one job because, uh, um, they just couldn't afford me anymore. So now it's one 40. Okay. And your wife work outside the home? Um, she makes about 20 grand. How old are you? 33. How long have you been married? Eight years. Do you guys have kids? Three, three. Okay. Um, I remember being right where you are. I was 28 with two and, um, and I didn't make it, I ended up bankrupt. Um, but I can share with you a couple of things. Okay. Um, one is, uh, this stuff will destroy your marriage if you, if you don't fight for your marriage. And so the two of you have to sit down and say, regardless of what happens, we're, yeah, we're doing it together. We're in it to win it and we have to lock arms and it's you two against everybody else. Right. Okay. Um, and she's scared. She's scared in a way you don't even understand. And you, if you're normal, um, this has taken a lot of your confidence in your swagger away. Absolutely. It did me, it took it all the way. Okay. And, uh, cause it just grinds you under a boot. And so once you say those things out loud, that means she gets extra hugs cause she's terrified. And we're going to do this. We're going to make it. We're not going to jail and we're not going to go hungry. I don't know what else bad is going to happen, but those two things we do know. Okay. Now, um, so you protect your marriage. And you understand that, um, that business failure is a part of running a business. Sometimes it happens and, um, and it doesn't define the rest of your life unless you allow it to. Uh, but it, but it does suck and it does make you think that you're not worthy and you are worthy. You're better. You're a lot better than you feel about you right now. Okay. Hear me, brother. You're a lot better than you feel about you. I've been there. I know. And, uh, out of the ashes of mine, this whole thing grew. So there's something that the side of this or something else to do, but right now sucks beyond belief. So food on the table, Trump's anybody else's request lights and water. Kept on Trump's anybody else's request, paying the first mortgage on the residence, so we have a place to eat. We have food and water and utilities. Trump's anybody else's request. No one gets in line in front of your family. Do you hear me, sir? Yes, sir. You take care of them and then you'll reveal her terror. We'll start to subside and your confidence will start to grow. And that's where you're going to grow to fight through. This is how taking care of those things first. Okay. Absolutely. Are you guys in a good church? Um, you need to be, you're not, you need to be okay. You need to get some people around you that love you and, and walk into the presence of God on Sunday morning while you're fighting the devil, because this is wicked stuff you're going through, dude. Okay. It's warfare and there's no other way around it. You've got to fight it. Okay. Now, I don't know if you're going to make it or not mathematically. As a secondary concern, I'm concerned that you make it and that your wife makes it in your marriage, makes it in your kids, make it, and the rest of these people can jump off a cliff. They're irrelevant to me. The SBA is going to get what they deserve probably, which is nothing because they're bankruptable. The IRS is not bankruptable and those nine 41s are not going away. So that thing right there is a real mess. You may end up selling the house to clear the stinking IRS. Right. I was thinking about going bankrupt, but, uh, the SBA, um, you know, it's, it's personally guaranteed. So there's, I don't know, you can't bankrupt the business. You're bankrupt because you personally guaranteed it. And that probably means you're selling house to pay the IRS. So you need to get the advice of a bankruptcy attorney. I'm not telling you to file, but you need to learn what your options are because number one is not credit cards. They can jump in a Creek. I'm not paying them nothing. Forget whatever you're paying them, screw them. They get nothing. And the SBA screw them. They get nothing right now. They can all just sit over there and look at this mess because they created it too. And we're going to get, we're going to work on the IRS. Oh, you got to keep the car payment pay because you have a car to get to work and you need to sit down with a bankruptcy attorney and learn. But I think if there's a way to manipulate through this, you're probably going to end up selling the house to clear the IRS. The rest of it is bankruptable and you can start over. But, um, I don't, I don't know how you're going to clear all this, making 140. There may be a way though, there may be a way. So, but take care of you, John, take care of your wife. Okay. Promise me. I promise. All right. And we're here. If you need us, you call me anytime. I'm here to help you. I've been right where you are. Hang on. Kelly's going to pick up. I'm going to put you with a Ramsey coach as my gift. We're going to be with you and walk with you. So I'm a 25 married. I got a, I got a daughter and about $550,000 in debt, including a mortgage. Um, just kind of feels like I have your every dollar out. I've been trying to use it, but even that, it just feels really overwhelming trying to see basically no light at the end of the tunnel. Right. So it's just a little need some guidance based on how to work it out from here. How much consumer debt do you have? Let's separate the mortgage out. Cause that'll help take away this mountain of debt you're looking at. Sure. Yeah. Um, second year, I have $145,000 home equity line of credit, uh, $14,000. Uh, personal line of credit on my wife's side that was transferred over from a student loan. Um, thousand dollar credit card and a $5,000 credit card. So 165,000 total was the home equity line for consolidating other debt. What was that? That, uh, two cars, um, that we had. And then some of it too, was basically Robin Peter to pay Paul, right? My wife went on here in Ontario, like you got 18 months of maternity leave. Right. So, but when you are on 18 months, the subsidy, the subsidy that you get from the government is very low. Like it could be maybe $500 a month. Right. So I was using that to pay for our home expenses too. On top of that, she couldn't afford to go on 18 months worth of leave, but did it anyway? Uh, 12 or 18 months. Yeah. That's what you get. No, you don't get it at full. You get it at 500 bucks a month and starved the death. So she couldn't, you guys could not afford for her to go out for 18 months, but she did anyway. Uh, yeah, she was on maternity leave for that time. Yeah. And use debt to fund it essentially. Yeah. At the time I was working a commission job, right? So I wasn't making a steady income at a time during that 18 months. At the time you couldn't afford for her to take that much time off and she did anyway. Yes. Okay. I want y'all to hear that. Uh, cause you can't, you can't go into these things and you'd fall backward into them again. You can do that once, but you need to learn what the mistake was. And the mistake was you can't look up and go, well, I don't want to work. Yeah. That's not an option when you're broke. All right. So, um, what do you make now? Uh, I make about 80 to a hundred thousand. What does she make now? About 65 ish, 70, you make 165. Yeah. I will get raises next for the next three years. How long has she been back to work? Uh, for about six to eight months now. Okay. Cause you should have easily been making it with both of you working and making progress, making, I mean, good God, what does it take for you to live? I mean, you should be putting five, six, eight, $10,000 a month. On these debts. Yeah. I mean, our take-home pay probably per month is about 8,000. Oh yeah. You're in Canada. You guys get your butts taxed off. We whine about taxes in the U S and you make us look like champions. Are you guys investing too at all? Uh, yeah, she has a, an investment account here. We call it, it's a tax-free savings account, right? So you get the, and you get to invest and you get to take it out tax-free, but you're capped at about 6,000 a year to put in. Yeah. You need to stop investing temporarily and work. What we call the baby steps. Have you ever heard of that? Uh, I have just based on the podcast. Like I've thought about getting financial peace university. I didn't know if it translated over to Canada, but I'm sure the principals would too. The principals do. I'll send you a copy of the total money make-over book and George, then he would work the baby step. So baby step one is a thousand dollars starter emergency fund. Likely you guys have that. And then baby step two, again, you're pausing investing. We're not borrowing another dime. You're going to pay off all of your debts from smallest to largest balance with the debt snowball method. So you make minimum payments on all the debts, but on that smallest one, attack it with a vintage. There was much extra as you can at it. And it gets knocked out real quick because it's the smallest one. Take that payment. You freed up, apply it to the next and to the next until you're completely debt-free. And if you do it that way, making 165 and maybe working even more, maybe you get a side hustle. You guys can clean this up in two years. No eating out, no vacations, no investing, no over taxation. Don't over withhold, make sure your withholding is the only what you have to pay in taxes. No more. You don't want to get tax refunds like we do in the U S it's a bad idea. And you guys got to live on beans and rice, rice and beans because you have made a freaking mess at 25 years old with babies. And that's not unusual. You're not a horrible person. Most people live like you're living, but as you described doing, you opened the call when I picked up the phone, it's no freaking fun. Normal sucks. I don't want to be normal. So you got to get mad and pay. I mean, if you've got any savings at all, that's not retirement savings. Start throwing it at these debts tonight, knock out that thousand dollar credit card, cut it up, knock out that $5,000 credit card, cut it up, knock out that little $14,000 personal loan and be done with it, man. That's only that right there is only 20 grand. You should be done with that in just a few months. And then that gets you down to the home equity line and the house. And then I want you to plow through that home equity line as fast as you possibly can or refinance the house and roll the home equity line into it, either one, but no more borrowing ever. You need to have plastic surgery, chop up the credit cards, a plasectomy. You need to decide I'm not living like this anymore so that you can get clear of this because you've, you've, um, spent more than you make your entire married life and it's reached the end. Mathematically. You don't have that option to do that anymore and it's stressful and it makes you feel shamed and it puts a strain on your relationship and you guys as a couple, as two grownups have to live on less than you make period. No exceptions. And by the way, Connor, that's all of us. We, all of you people listening, all of you people watching, you have to live on less than you make. And I was the master at spending money and borrowing it to cut and borrowing to cover up my disorganization, my impulsive spending, my entitled mentality. I had all of that in my twenties. And it's one of the things that led me to build a business that caused me to go bankrupt. And, um, that, that's how I learned all this stuff was the hard way. So I've done it worse than you. And one of the biggest traps out there is when you play the shell game, you start moving the debts around. Well, we can consolidate that. We can wrap it into the HELOC and you feel like you did something because action was taken, but you just move the debts around and didn't clean any of it up. In fact, it probably is worse now because they're not separated. So you don't get to do the debt snowball with a giant HELOC sitting there. And so this is, this is the stupid tax that we talk about. And one day you look back and go, man, remember when we were young, we made all those decisions. Well, at 27, you guys are going to be completely debt free. If you do it this way with the rest of your life or sooner. Yeah. You heard Dave get to work. Yeah. I mean, I want you guys beans and rice, no freaking life. And I don't care if you're broke. Friends are making fun of you. If you're broke, friends are making fun of your financial plan. That means you're right on track. It's like fat people making fun of your diet. You don't care. I don't, I don't care. I'm trying to stay alive. I'm trying to build a future here and you don't have any credibility to make fun of me. So you don't get a vote in my life. Um, you know, and when you reach that kind of stuff, that's when everything changes. And, um, so you and your wife tonight need to have a come to Jesus meeting. And the two of us say, all right, we are not doing this anymore. Brand new life to children, having children, no more. We're two adults now, and we're going to make adult decisions and we're going to get after this and adults devise a plan and follow it. Children do what feels good. And I got to tell you, I don't care if you're 55 or you're 25. If you just do what feels good. I work so hard. I deserve it. You don't deserve nothing. Shut up. You whiner. You deserve it. When you saved up the money and paid for it. Cause you worked your butt off. That's when you deserve it. Until then you didn't deserve it. I wear a card. Like we all don't work hard. You want some cheese with that wine? Shut up. If you made it all the way to the end, congratulations. You've officially heard more about strangers finances than most people here in a lifetime. Thanks for hanging out with us and check out another compilation right here. You never know what the next call will be.