Beat up, not bankrupt
Question: William is facing bankruptcy and wonders if he should empty his 401k to pay on his debt. He went from making $23 an hour to $11 an hour, his father died and his wife left him. He was having suicidal thoughts. After hearing how much he owes, Dave tells him why he's not even close to bankrupt, but also why William thinks he is.
Dave Ramsey's advice: You are almost current on your other bills and have $12,000 in debt. You're talking about filing bankruptcy on $12,000. Your income is not going to change as a result of bankruptcy. I think what's happening to you more than anything is your emotional state. What happens with depression and suicidal thoughts is that is you losing your hope. If you had hope and were fired up, $12,000 wouldn't be a big deal. You're more bankrupt emotionally than financially.
I would change the way I'm thinking about this stuff. Talk to your counselor or pastor. You can choose to not pay on the debt until you get your fight back. When that happens, you can go back and clean this up. That may be by Christmas. But anyway, you could get a job making $1,000 a month and have this mess cleaned up in 12 months. You're nowhere near bankrupt, you're just scared and beat up. You've been kicked in multiple areas of life all at once, and it's only human to be scared and beat up. You're not bankrupt; there's a lot you can do when you get your fight back.
Take the credit card bills and throw them in the trash. Then this time next month, wake up and pray that God gives you what you need to attack this. If He doesn't, then throw them away for another month. Keep current on the living expenses and get after the credit cards when you have the energy to do it.
I was listening to you this afternoon, and brother; your story brought back some pretty horrible memories for me. Yes, I was once in your shoes, except for losing my Dad. Well almost! He suffered a heart attack the day before my divorce court date, and I drove from Austin to Houston to see my Dad, and then turned around and made a 9am court date the next morning. Dad is still kicking it and loves all his Grandkids, family, and life dearly!!! My EX was a keep up with the Jones’s kind of person, and when I realized I was quite content and began to settle down, she bolted. Words can’t describe the ups and downs I went through, but my family, friends, and Jesus Christ saw me through it all. Today, 3 years later, I am still in debt (about 100k down from 160k) and I am happier than ever. I am on the right track. My wife's a Christian just like me, we just adopted our 2 daughters, and we joke and say she's a stay at home Mom and I'm a stay at work Dad. Following Dave’s advice has been a life changing experience for me, and I enjoy sharing every detail with anyone who will listen. You are down but not out, so keep your chin up and know that Jesus will provide for your every need. I had faith and prayed every day, and I know it was Him who brought me through all of my hard times. Dave knows what he’s talking about so take his word, put it in your pocket, and let it lead you through every step. Take care of those kids, and God Bless you brother.
Wade, Austin, TX
I have almost the same situation. The last 4 years have been awful. I have owned my own business for 15 years and I am facing bankruptcy. I have not filed yet but I am just at the place where I cannot make the payments. I am stressed beyond belief. 4 years ago, I had major surgery that left me with complications. 3 weeks after the surgery, my sister and 2 nephews moved in due to a pending divorce. I didn't get much rest. 4 months later, my mom was diagnosed with cancer. I lost her a year ago. During this time, 3 years ago, my business started dropping off as I was focused in the apartment industry offering marketing and interior decorating. Condos were becoming the rage in FLorida and taking business away from me.
I decided to purchase a franchise that I thought would help me transition to residential interior decorating. It was a big, big mistake for several reasons. During all of these major life issues, I kept the business going, or so I thought. Since I bought the franchise, I have been using debt to survive. Well now, business is gone, all of this year due to the real estate situation. So, I was using more debt. It's a huge number that is overwhelming. I don't know what to do but the two big jobs I was counting on, are on hold and I have no income coming in. I have read Dave Ramsey's book and was planning on tackling my debt but I feel so overwhelmed that I am ready to meet with an attorney to discuss bankruptcy. I feel helpless and so stressed. I wish I had some detailed advice on what to do. I was raised to be conservative with debt and to keep my credit excellent. My credit at this moment is excellent and considered low risk, which really, is a joke based on how much money I owe. If I get through this, I don't think I'll ever want to use credit again.
Mr. Ramsey, if you have staff that can advise me, please tell me what I need to do to get that advice.
Thanks to everyone that is reading this.
Diane
your situation is so identical to what I am dealing with that I could not sit here and do nothing.
I want to do some good when I can but to often ignor the opportunities that are in front of me.
I was a small home builder for 26 years with excellent credit and using it to the hilt.Life was riding on some pretty good surf there for awile so I thought.I was beginning negotiations to buy a home building franchise to help give me an edge and continiue building homes. Than the market started it's dramatic descent.
The income stream came to a hault and I had over $10,000 a month in debt....house,autos,cards etc...
My mother was diagnosed with cancer 6 months ago.
My wife almost left me during some very depressed times last winter.
I am days away from filling my bankrupts case.
I heard Dave Ramsey one day about a year ago and I am sick at the thought of borrowing money again.
My credit is shot at this point anyway.
I gave my cars,trucks and home back to the banks. I have nothing left.
I still owe thousands on cards and short sales. I am going ahead with my bankruptsy.
I have resolved to the fact that I have made some mistakes and we small business owners are entreprenures. If we fail...fail forward. Grab your boots by the straps,through them on and try agian.
Good luck.
I will say a prayer for you now.
Dan
I am close in context as most of those who have posted comments. I am 33 y/o. I live with my mother, still. I declared bankruptsy seven
years ago, with the desire to correct my problems. I only compounded my problems and made them worse. I credit was trashed, I was unable to purchase a house because of my credit, and I sank deeper and deeper into debt. I was able to purchase vehicals. I bought a BMW car and motorcycle (Stupid, stupid, stupid!!!) thinking that my current career would cover the cost. It does but I am not able to get anything else because of my credit score. I have a few late pays, extended credit, and a headache a mile long. I have too thought of suiside to escape my problems; but, this is truly the wrong answer to my problems. My current situation is this, I owe 4,000 to the IRS this year on top of a 1,000 that I still owe from last year. I have a BMW car that keeps breaking down, so I am unable to sell the car for what I need to pay it off and a motocycle (BMW) that is broken as well same problem unable to get what I need to get out of vehical. My truck is paid off however it needs a thousand dollars in repairs to get running. I
I am at my witts end. I do not have anything saved to even sell the vehicals I need to sell at a loss. To make matters worse last year
I made 63,000 gross and I have no idea where the money went. I need a budget, I need savings, I need for things to go right for a change,
I just need help!!! The only thing I can think of doing is to declare bankruptsy again and pray I don't screw my life up anymore than I al ready have. Why can't life be easier?