Huge doc debt!

Thursday, Feb 28 in Budget | Comments (4)

Question: Irma and her husband have $300,000 in debt, not including the house. They have student loan debt for $175,000, the rest being credit lines and credit cards. He makes $200,000 a year but they are broke. He was relieved to hear that she had Dave's plan, because he was relying on her to clean up this mess for them.

Dave Ramsey's advice: He has to handle this. You're his wife, not his mother. Get rid of your van lease by calling and asking what the early buyout is. Then get yourself a very cheap van. You guys have absolutely no lifestyle for the next 2 or 3 years. You have to make $200,000 and live off $40,000 or so in order to put serious money on this debt and get rid of it.

You guys have to get your budget out together and work it out together. Pour over that budget every month for the next 3 years. You'll live on nothing and you can begin to whittle this away. You've got ridiculous debt but a great income. You have a huge mess that you'll spend a decade cleaning it up unless you get gazelle intense.

Hear the call!

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These people make $200,000 a year and they are broke

# Posted by sonia wooldridge | 2/28/08 8:51 PM

Dave says to find out what the early buyout is for the van. How are they suppose to buy out their lease to buy a cheap van? What about the penalties? Where do they get the $$ for that?

# Posted by Shauna | 2/29/08 9:34 AM

Just goes to show you that your "expenses" will grow to match your income. No matter what the income is.

# Posted by Devans00 | 2/29/08 10:36 AM

That me! Yes, our debt slowly added up until they became overwhelming. We lived on credit and my little bit of income during the 4 years of med school and 4 years of residency. We adopted our daughter using a credit line, and spent years paying our bills with other creidt lines. It is so overwhelming....

# Posted by Irma | 3/16/08 11:42 AM

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