Only Making $12,000 And Living Off Debt

Brought to you by the EveryDollar app. Start budgeting for free today. I know you're not really for bankruptcy, but I wanted to see what you thought in my situation. It would be a chapter 13, so I'm about $200,000 in unsecured debt. That includes anything from payday loans to high interest credit cards. I think like I'm spending around $9,000 a month and I think I bring home around $11,800 after tax. So not much left. I've tried to do like the debt snowball and it's not really getting anywhere. What is all the debt? $200,000 unsecured? Yes. What do you owe on your cars? So I got one car, I think I owe right around $27,000. Is that in addition to the $200,000? Yes. So I mean, it's a Tesla, so I don't have to pay for gas. So I mean, I don't know if that really makes up for it, but I will be paying. No, it doesn't make up for it. You got $27,000 worth of debt while you have $200,000. How'd you get $200,000 in unsecured debt? That's a good question. So I was a realtor and right around the time COVID happened, I wasn't making much, maybe like 12,000 a year. And I just started, you know, happened to take out loans and debt that cover basic living expenses. And then it's just kind of grew from there. You went a long time without working. $200,000 worth of time without working. Because you're putting your life on credit cards instead of picking up a different job. Is it just you, John? Or do you have a family, a wife? No, I have a wife. But so I mean, I'm the one bringing in the income. But I didn't really have any gaps in employment or anything. But yeah, I was like making $12,000 and then I slowly progressed. I mean, over the last five years, I went from $12,000 to $200,000. Well, that is a gap in income. If you tell me you're lived on $200,000 worth of borrowed money, that's a gap in income. Or you were spending more than you, you know, one of the two. I think it was just the, like the payday loans, like the, the amount. So like, because my salary is right around 200 now, but with the payday loans and stuff, it's like I had to get, I had to... How much of the 200 is payday loans? Probably $35,000 to $40,000. It's not the payday loans then. You still got $265,000 or $165,000 worth of other stuff. Does your wife, does your wife know about this? She does. All of it? Yeah. How long y'all been married? Um, about two, three years, but we've been together for 10 years. Well, this is a very, very scary thing that you're in and to go through, sir. I've been there and I know how it feels to stand in the shower and scream and cry because I was so scared. I didn't know what to do next. So, um, that's a, it's a mess. It's a real mess. Um, you're, you're, you're really not bankrupt. Um, and bankruptcy is really not going to solve your problem because the chapter 13 is 60 months of paying payments on these. And there's a formula that's going to dictate that you pay a large sum of it, not all of it, but a large sum of it back. And if you're going to pay a large sum of it back in a chapter 13, over 60 months, then you can also pay a deal, work a deal with these people and work it through. We have a, uh, an advertiser named guardian litigation that helps people in these exact situations. And it's much easier and quicker than bankruptcy. Um, your credit is destroyed and it's going to continue to be destroyed. Good. Cause John doesn't need to be borrowing money again. So, um, that's a good thing. Uh, but so just continue that idea, your credit's destroyed. And then how, what is the, you know, the most efficient way to clean this mess up chapter 13 is not, um, when you run the actual formulas that are required by law, uh, against this debt, um, you're, you're going to pay back a lot of this, not all of it, but a lot of it because you make a lot. And so if you made $14,000 a year, well, then you wouldn't be paying back much of it, but the formula is based on your income. And so you're in the law wants you to pay as much as you can pay in bankruptcy or not in chapter 13, that is, and it's called a wage earners plan. So I'm going to put you on hold and we're going to connect you with the folks at guardian litigation and see if they can help you. I think they can. And basically what we're going to, what they're going to do is they're going to go through with each one of these and and stop the interest and lower the balance and then pay it out. And the good news is if you keep paying, you know, five, $7,000 a month, you're going to be out of this in a period of time. That's shorter than five years. And you won't have filed bankruptcy. Hang on to your marriage, brother, sit down with your wife, tell her you love her. You're important. You make a lot of money now. You can clean this mess up and learn from it and never be back here again. I did create your free every dollar budget today. The simplest way to budget for your life.