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Ask Dave

Dave's Debt Free Story

How did Dave Ramsey go from Chapter 7 bankruptcy to being debt free?

QUESTION: Martha asks Dave how long it took him to become debt free. There are several parts to that story as Dave tells it.

ANSWER: In September of 1988, we filed Chapter 7 bankruptcy, which wiped out the majority of the debt. We had a home mortgage, owed the IRS and reaffirmed a couple of debts that we shouldn’t have. We came out of the bankruptcy with some debt still, because we did some dumb things.

We moved in 1992. It took four years and that included the sale of our house to pay everything off, including the IRS debt. We then rented for two years, and we ended up buying a home seven years after it all started, and we were free.

Then a few years back, we felt like God was telling us to go back and pay off all the bankrupted debt, even though we didn’t legally owe it. I don’t tell other people to do that, but I felt like the Holy Spirit was telling me to do that. We found each of the creditors that we bankrupted on and paid them. It was hard to find someone at a bank to take a check for a debt that’s 20 years old and no longer owed. It took about six months to get that all taken care of.