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Its dangerously easy to fall into financial troubles these days.
Dont even get me started on student loans!
But what happens when our debt spirals completely out of control?
Unfortunately, thats the nightmare that one recent caller onThe Ramsey Showis living.
Ive been paying it back for a couple of years at this point.
The car is going, I already decided that.
Were going to get rid of it.
Still going down.The caller:The rest is installments and credit cards.Jade:Wait, hold on a second.
trigger the rest because theres still a good deal left.
Is it all credit cards?
What is it?The caller:Installment loans and credit cards.
Jade:Like private loans?
Whats in the credit cards?
Ive been trying to be smart and it didnt quite work out.
So I would throw money on a card or get the installment loan and they pay me back.
And Ive been making some profit on it.Jade:Youre taking out debt for other folks?
The caller:Rightnow, one guy stopped paying and its really been… its so much stress.
I mean, its one thing to take out debt for yourself.
You know that, I think that you feel the weight of that.
I think you know, I hope that you know.The caller:I do.
Jade:Is it just you?
Do you have a family?
Tell me more.The caller:No, its a full family.
Shes sitting right next to me here.
We have three kids.
We have a full house.Jade:Are you both working?The caller:Yes, shes working.
I need her to work 40 hours a week.
I need her to pick up something that is just as solid as what youre doing.
And then after she does that, and this applies to you too, youre both getting side jobs.
You guys are about to work your bootys off.
Theres no other way, okay.
So you already said that youre getting rid of the car.
Youre gonna take a $10k loss.
Youre still getting out of $32,000 of debt.
How is this… Is there any way to get out of it?
Are you able to sell them?
Have you looked into anything?The caller:They essentially replace my utility bill.
Thats what it is.Jade:Right, but can you get out of them?
Can you sell them?The caller:Probably at a loss.
Im sure it would be $10,000 to $15,000 loss, if not more.
But youre also… youre not thinking about the debt thats gone.
Credit cards will soon start charging because the balances are like on zero balance promotion and so on.
So weve got to start today.
What are you paying every month for your home?The caller:Its about $3,200.
That includes mortgage, taxes, insurance.Jade:Are you guys on a budget?
We gotta go and we gotta go like our life depends on it because yours really does.
Wife is working, were starting that process to get her full time tomorrow, okay?
Im looking at ways to get rid of the car instantly.
Sell off these solar panels if it’s possible for you to.
Im looking for ways to do anything I can.
Did you get it recently?
Or have you had it for a while?The caller:Two years ago.
Jade:Whats it worth?
And whats the interest on it?The caller:Probably under 3%.
We put 20 percent down.Ken:I would be scorched earth now.
Id put them all in one room.
I would be going bananas on this to take that $130k and put it towards this debt.
Get you some breathing room.
Your life is going to be so much better, so much faster.
This house is just as big a problem in my mind as everything else.
Its too much of their income.
Id get out of it now.
Thats what I would do.
Id rent.Jade:Yeah.
You need every dime that it’s possible for you to get.
Im not gonna make any bones about it.
All of its gonna suck.
But its not going to happen if you dont do the things that Ken and I told you today.
Starting today, dont leave anything out.
Dont attempt to skirt the process.
Meanwhile, theyre spending nearly 10% of their monthly income on paying off debts.
Some admitted that it might even take them a lifetime to pay off.
Many residents also go into debt by trying to keep up appearances.
But of course, debts are often taken on out of necessity as well.
Do not be afraid to seek help if youre struggling with debt.
Those in debt also need to get creative and find any way they can to cut costs.
Falling into debt is a dangerous game that can feel impossible to get out of.
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