05.27.26 Spotlight On Home Sellers / Paper Chase Account Security

Summary

The Clark Howard Podcast — Episode Summary

Episode Title: Spotlight On Home Sellers / Paper Chase Account Security
Date: May 27, 2026
Hosts: Clark Howard (host), Lane (Clark’s wife, guest co-host, filling in for Krista)

---

Overview

In this episode, Clark Howard offers vital updates for home sellers in a tougher real estate market and doubles down on his longstanding advice to safeguard your financial accounts with proper documentation and security. With his wife Lane guest co-hosting, the show dives into listener questions on real estate commissions, family lending for homebuyers, navigating REO (foreclosure) purchases, handling major debt, and modern airline documentation. The episode is packed with actionable advice, memorable anecdotes, and Clark’s signature blend of cautious optimism and frugality.

---

Major Themes and Discussion Points

1. Home Selling in a Buyer’s Market

Time: 01:06–05:27

• Sellers must up their game: The surge in interest rates and inflation means buyers are pickier and deals are harder to close.
• Importance of curb appeal: “That emotional first connection with a house is so very important with buyers.” (Clark, 03:05)
• Preparing your home: Fresh paint, landscaping, and taking care of obvious repairs matter more than ever.
• Real-world anecdote: Clark refers to a MarketWatch story about sellers crowdsourcing feedback from visitors via social media—even if it stings—to better understand and fix what’s turning buyers off.

2. Navigating Real Estate Commissions

Time: 05:54–08:45

• Listener question from Crystal in Jacksonville, FL about realtor commission splits.
• Impacts of recent court rulings: Commissions are now negotiable, and sellers have more power.
• Clark’s advice:
  • You can negotiate both the listing agent’s and buyer’s agent’s commission.
  • If you offer a buyer’s agent nothing, “They’re going to do what’s called steering, where they just magically never tell their buyer about your home.” (Clark, 07:30)
  • Paying some buyer’s agent commission (around 1.5%-2%) is becoming standard but is still lower than pre-ruling rates in many areas.

3. Family-Financed Home Purchases

Time: 08:45–11:03

• Listener Lisa (Texas) considers buying a property for her daughter until her own home sells.
• Clark’s response:
  • It’s cleaner and safer to loan your daughter the money rather than buying and reselling the house.
  • Use a real estate attorney to structure a short-term, low-interest family loan compliant with IRS guidelines.
  • “It’s such a simple, streamlined procedure. This will not be the first rodeo for that real estate lawyer.” (Clark, 10:24)

4. Buying Distressed & REO Properties

Time: 11:10–14:28

• Listener Mary (Florida) asks about buying a Freddie Mac REO that’s been in foreclosure for years.
• Clark’s insights:
  • REOs can be a bargain but require extra caution—budget for deferred maintenance and possible repairs.
  • Get an agent to represent you and expect to pay a small commission (often 1.5%–2%).
  • Insist on a thorough inspection to uncover hidden issues, especially after years of neglect.
  • “You want to be able to buy it below market and also have to budget for the oops you’re going to have.” (Clark, 13:24)
  • Personal anecdote: Clark shares that his first home was an REO and discusses the trade-offs, including unexpected repair costs.

5. Account Security: The “Paper Chase” Story

Time: 19:58–26:29

• Clark tells a chilling tale from the New York Times:
  • Marta, a 35-year-old who went paperless with Fidelity, had her accounts “zeroed out” after a system snafu.
  • Without paper statements, she had no proof her money ever existed.
• Security warning:
  • Clark urges listeners to download account PDFs monthly—even if they’re “beaten over the head” to go paperless.
  • Importance is underscored by the risk of cyberattacks and even software vulnerabilities (Clark references new exploits like “Mythos”: 24:45).
  • “No proof could end up being no way back to your money.” (Clark, 26:19)
  • Paper is still king for legal proof—even if it feels old-fashioned.

6. Listener Mailbag — Debt, Gas Saving, Travel, and More

• Major Debt Recovery
  Time: 26:56–31:48

  • Anonymous listener in MA has two large “charged off” car loans due to insurance denials after accidents. Owes nearly $100,000.
  • Clark’s steps:
    • Attempt to settle for “pennies on the dollar”; credit already damaged, so leverage potential bankruptcy for bargaining.
    • Insist all settlements are in writing.
    • Consult a nonprofit credit counselor via NFCC.org if no progress—legitimate help is available.
    • “You…have the power in this situation.” (Clark, 28:56)

• Gas ‘Dollar Cost Averaging’ Tip
  Time: 31:48–33:18

  • Ann from CA fills up at Costco routinely, likening it to “dollar cost averaging” fuel prices to hedge against local spikes.
  • Clark thanks listeners for El Segundo Costco gas tips, noting “six bucks plus a gallon” makes shopping for deals critical in California.

• Delta Airlines & Passport Scanning
  Time: 33:18–36:25

  • M from Colorado asks about Delta’s push for digital passport scanning.
  • Clark reassures: It’s for automation and immigration compliance, not strictly required—manual alternatives remain.
  • “It’s totally up to you, M, if you want to do it. But that’s what this is about.” (Clark, 35:23)

---

Noteworthy Quotes and Moments

• “That emotional first connection with a house is so very important with buyers.” (Clark, 03:05)
• “If you put down zero [on commission], that’s right, they’re not going to show your house.” (Clark, 07:30)
• “No proof could end up being no way back to your money.” (Clark, 26:19)
• “You…have the power in this situation.” (Clark, 28:56)
• Lane on savings nerves: “They’re just numbers on a page, and that’s terrifying these days.” (Lane, 26:49)
• Listener humor (gas fill-ups): “I consider this dollar cost averaging. So I catch the price on the way up and the price on the way down.” (Ann, 31:51)

---

Episode Structure and Timestamps

• 01:06 — Main topic: Home sellers, real estate prep, and market changes
• 05:27 — Lane joins as guest co-host for listener Q&A
• 05:54 — Negotiating real estate commissions
• 08:45 — Family lending for homebuying
• 11:10 — Buying REO/foreclosure properties
• 19:58 — Paper vs. paperless: Account security warning
• 26:56 — Handling challenging debt and credit situations
• 31:48 — Listener gas-saving tip
• 33:18 — Digital passport scan question for international flights

---

Final Thoughts

Clark and Lane deliver a packed, fast-moving episode with actionable tips for today’s financial landscape—whether you’re selling a home, safeguarding investments, or managing debt. The core message: Stay proactive, negotiate instead of assuming, and put security (and documentation) first.

Clark’s signature sign-off: “Save more, spend less, and never, never, never, not ever get ripped off.”

Transcript

[Windows 11 College Deal Announcer]

Study and play come together on a Windows 11 PC and for a limited time, college students get the best of both worlds. Get the Unreal College Deal Everything you need to study and play with select Windows 11 PCs. Eligible students get a year of Microsoft 365 Premium and a year of Xbox Game Pass ultimate with a custom color Xbox wireless controller. Learn [e-mail] studentoffer while supplies last ends June 30th terms at aka mscollegepc

[Indeed Sponsored Jobs Announcer]

when you need to build up your team to handle the growing chaos at work, use Indeed Sponsored Jobs. It gives your job posts the boost it needs to be seen and helps reach people with the right skills, certifications and more. Spend less time searching and more time actually interviewing candidates who check all your boxes. Listeners of this show will get a $75 sponsored job credit@ Indeed.com podcast that's Indeed.com podcast. Terms and conditions apply. Need a hiring hero? This is a job for Indeed Sponsored Jobs Foreign.

[Clark Howard]

The Clark Howard show. You know Our mission is to serve you with advice and information that empowers you to make better financial decisions in your life. Today we're going to talk about something really important because a lot of homeowners got kind of lazy getting their houses ready for sale over pretty much the last 12, 14 years. That doesn't work anymore. I'm going to talk about what you need to look at doing if you and a market that their equilibrium switch to buyers versus Sellers, what you need to do as a seller to get your house ready. And think about this. For the last three, four years, I've talked about the importance of you keeping paper statements for brokerages and bank accounts. And if you don't get paper statements and you get email statements, why it's important that you download each month your statements, I'm going to tell you a story from Customer Fidelity Investments that will terrify you and maybe get you doing what I've tried to get you to do for a good while. Right now I want to talk about a house for sale. So I want you to think about this from the perspective of a buyer. I've bought and sold so much real estate over the decades that I can tell you that at least half the time I go to see a house that is occupied for sale, that the sellers have been clueless or lazy about getting that house ready for sale to be on the market. That first impression, that emotional first connection with a house is so very important with buyers. And today, with interest rates having spiked again because of the Iran war and inflation cooking again in The United States, ugly inflation. Recently, four year high on inflation pushed interest rates up. Standing out there as a seller in a market where buyers are like, I don't know, interest rates are high, housing prices are high. For you to stand out where somebody's going to want your home, it's got to have, first of all, curb appeal. Somebody drives up, it's got to be their fantasy. It's got to look good. The lawn has. If you got a lawn, it's got to look good. The landscaping, all that green stuff you have around a house has to look good. And then inside, maybe the house needs a fresh coat of paint. Maybe there are some things you put off repairing that are going to be obvious to a potential buyer or certainly to the home inspector. They would have. You don't want to put things out there that kill the fantasy, the desire of people to want to buy your home. And I saw a story recently that I thought was quite funny. It was in Market Watch about how people are posting, asking people who come look at their home to post on social media what they didn't like about the house. And you got to have a thick skin for this. But people are doing it because they want that feedback, the things that you don't even see as a seller that will get you to focus on what it's going to take to be the house that stands out, that a buyer is buying their fantasy. You know, buying a home is both a practical thing that you live in and that emotional connection. You need to hook them and you hook them early by having that house look good, not be a fixer upper that they're going to have to deal with. Now we have an unusual situation today. Instead of Krista, we have my wife Lane today.

[Lane (Clark Howard's wife, guest co-host)]

Hi there.

[Clark Howard]

And Lane's going to be with us the next week and a half because Krista's on vacation. And for the first time ever since the podcast started, Krista and I were not able to coordinate this particular vacation. So, Lane, thank you.

[Lane (Clark Howard's wife, guest co-host)]

I can see why she would need a big vacation, you know, being with me.

[Clark Howard]

Yeah, I got it. So you ready to hit me with the first question?

[Lane (Clark Howard's wife, guest co-host)]

I am ready. Okay. So first of all, we have Crystal in Florida and Crystal says I'm placing my house on the market in Jacksonville, Florida. When I was looking over the paperwork for the contract, there was an option there for me to agree to pay 2% to a second realtor if they bring the buyer to the deal. That means I would pay my realtor 3%. 3% and pay the other realtor 2%, putting me back at 5% of my home sale going to Realtors. Is this common practice now? And are you seeing this elsewhere? What other options do you have? I did ask our Realtor what would happen if we didn't agree to that, and he just said that other Realtors would not show our property. So she says there's always a backdoor way around the law.

[Clark Howard]

Okay, so what you're referring to, Crystal, is how court decision and an agreement that the real estate industry made with the court means that now the commissions are negotiable. Your agent, your listing agent just popped that 2% in there. You have the right to negotiate what that listing agent's going to receive that 3%. You say, you know what, I really only want to pay you two, two and a half percent. And that listing agent has the right to say, well, then I'm making the choice that I don't want to handle your listing. You have that negotiating power with the buyer's agent. That second commission is for the person who brings a buyer to your home. If you put down zero, that's right, they're not going to show your house. They're going to do what's called steering, where they just magically never tell their buyer about your home. So you got to pay them. I mean, why are they going to have any incentive to show your home if you're telling them they're not going to get paid for doing so? So then the question comes, what is that commission? Is it one and a half? Is it two? Two and a half? It's kind of settling into numbers in different metro areas. The good news is what people are having to pay is lower than it was generally around the country before Florida was historically, depending on which market, a 6% or 7% commission market, you're talking about it being 5 at what the agent has already pre filled. That's already an improvement of where the market was. And so the trend has been sellers, friends, but it's not led to a collapse of commissions generally, just a reduction in commissions. And you are the one who decides. You don't have to accept what's put on that piece of paper.

[Lane (Clark Howard's wife, guest co-host)]

All right, we also have Lisa in Texas, and she says, my daughter wants to buy a particular house that's currently on the market, but she can't purchase it until her house sells. And is there any harm in me paying cash for the house? And then when her house sells, she can repay me with the same price that I purchased it for. I would pull the money from my brokerage account and Roth ira. I know I'd lose interest until I get paid back, but it would be worth it since the grandkids would be close to me. Yeah, I'm over 59 and a half and I've had the accounts for over five years. I. I have over a million set aside for retirement. Please let me know if there's any downside to this besides losing the interest. She says she's enjoyed your podcast for many years.

[Clark Howard]

Well, thank you very much for that, Lisa. Okay. The way I heard what you read, Lane, is that you would buy the house and then turn around and sell it to your daughter. That's not how you want to do this. That's way too complicated. What you would normally do is she buys the house and you are the lender. You do a loan with her. You're going to have to have a lawyer involved anyway. Lawyer does real estate closings, and you just set it up where you do a loan to your daughter. The IRS will require that you charge her a nominal interest rate. They reset the rate. I'm trying to remember how many times a year. But the real estate attorney will know what that rate is, and she'll pay you this nominal rate of interest when her current house sells. Then she just pays off the loan and she owns the house free and clear. That's the right way to do this. And for you, the nominal interest will make up some of what you might be foregoing by not having the money invested or saved. But this is a very common thing that parents do. And I can tell you this will not be the first rodeo for that real estate closing attorney to set this up for you. It is such a simple, streamlined procedure.

[Lane (Clark Howard's wife, guest co-host)]

That's really kind of. Lisa. Okay, so we also have. I don't know. I don't know. I'll think about it.

[Clark Howard]

Okay.

[Lane (Clark Howard's wife, guest co-host)]

Okay. So we have another question from Florida. This is Mary in Florida, and she said, my spouse and I are first time homebuyers in Florida and we recently found a property that we are very interested in purchasing. The home went through a long foreclosure process and is now owned by Freddie Mac after the previous owner reportedly did not pay the mortgage for about five years.

[Clark Howard]

Wait, wait, wait. They got to live in their house mortgage free, for five years?

[Lane (Clark Howard's wife, guest co-host)]

That's pretty bad, isn't it? Okay. And repeatedly they delayed the foreclosure case in court. The Freddie Mac lawyer called it bountiful, frivolous filing with no legal merit.

[Clark Howard]

No kidding.

[Lane (Clark Howard's wife, guest co-host)]

The property is not officially listed for sale yet, but we believe it may become available soon. And we are trying to understand whether pursuing a distressed foreclosure REO property as first time buyers is a smart financial move or whether the risks are just too high for inexperienced buyers. So, so what steps should we take before the property is listed? Should we try contacting Freddie Mac or the future listing broker early? Is there any room to negotiate with Freddie Mac because of the background of the previous owner? And how can we evaluate whether this is a good opportunity versus a property with hidden repair or legal problems?

[Clark Howard]

All right, Mary. The very first property I ever bought when I was 22 years old was an REO. REO means real estate owned, meaning that the lender ended up with the property. Now, Freddie Mac will probably use an agency or may even somehow be a firm that they turn the property over to to handle the sale. So you need to hunt for an agent to represent you. And you'll have to agree in this case, you'd have to agree to pay them back to the prior question about commissions, maybe 1.52% to represent you in this. And they will be the ones that will figure out how the property is going to be disposed of. Who's going to handle the sale of the REO for Freddie Mac? And as to whether it's a good idea to buy a home somebody didn't pay on for five years, an inspection is going to be really important. Because what happens in a case where somebody is just trying to freeload for year after year after year is they're not fixing anything and you don't know how much they trash the place through those five years. So you want to be able to buy it. The whole purpose of buying the REO because it's more effort, you want to be able to buy it below market and you also have to budget for the oops you're going to have with the various things that have not been properly maintained that you're going to end up responsible for. There was an REO near us in Florida that had a similar situation. And Lane, you remember how sad that house looked?

[Lane (Clark Howard's wife, guest co-host)]

I do. It was very sad.

[Clark Howard]

And there was all kinds of shenanigans where in that case the family was able to stay in it four years without ever making a payment. And by the time that house was finally foreclosed on, wow. The people who bought it, they ended up with a major project, the house had moisture damage and other things that they had to deal with. So I don't say that to discourage you. I say that for you to go in with your eyes open. And yes, I have bought foreclosures repeatedly. I've always bought them as REOs and it's always worked out for me, but I've always had things I'd had to deal with because it was an reo. So just first time home buyer, you're thinking, can I really handle this? Yes. Just requires more work. But it may in fact generate an instant return on your money if you can buy it below what the general market prices are in that neighborhood in that area. Coming up ahead. Wow. How would you feel if you woke up one day and all the money you'd worked hard to save and invest had vanished? Well, let me tell you the story and you'll really take seriously my suggestions on Paper Statements Straight Ahead Self Directed

[Schwab and Policygenius Announcer]

Investing Trading Full Service Wealth Management Automated Investing Financial Planning Thematic Investing Retirement Planning Few. And to think that's just a small taste of what Schwab offers. Because Schwab knows that when it comes to your finances, choice matters. No matter your goals, investing style, life, stage or experience, Schwab has everything you need all in one place so you can invest your way. Visit schwab.com to learn more. This episode is brought to you by AT and T Business for business owners, Connectivity is key if you are starting your business today, that would be your first concern and your first decision. Reliable connectivity is essential to launching whether you're local or national. For a business owner, it's a decision that pays benefits every day and in every aspect of your operation. AT&T business is a reliable provider for small business owners. For Small Business Month, we celebrate small businesses by helping them run better. This means reliable uptime, Easy Switching Smart Communications Powered by AT and T Business Built to Work Get AT and t [e-mail] hi, I'm Don McDonald from the

[Don McDonald (Talking Real Money podcast host)]

Talking Real Money podcast. Simple, honest financial advice is hard to find because there are too many people in the financial services industry and even the media who will do or say anything to get your money. Well, for decades, my co host Tom and I have been trying to help people better manage money on the radio, TV and in our podcasts. About five times a week we share simple, low cost advice on building the wealth you need to enjoy a better future without making your broker richer. And ironically, you broker. Listening to Talking Real Money could not be easier because you're already listening to a podcast. Just search for Talking Real Money on your podcast service or ask your smart speaker. Give us a try. You have absolutely nothing to lose except a few minutes of time and you might just discover something to help you enjoy a more prosperous and secure future along with a simpler present. Just visit talkingrealmoney.com or search for talking real money in this podcast service. It's that easy.

[Schwab and Policygenius Announcer]

Summer is a great time to reflect on the life you're building and ensuring the life you've built is protected. While you're vacationing, do you feel a renewed sense of responsibility and urgency to ensure your family has a safety net big enough for what they need? If this is you, it's a great time to protect your loved ones and your financial planning for the future with policygenius Getting life insurance through policygenius is as easy as a summer afternoon breeze. Policygenius is an online insurance marketplace that allows you to compare quotes from some of America's top insurers side by side for free. Their licensed team helps you get what you need fast so you can get on with your life easily. Find what you need Coverage, Amounts, prices, terms. There's no guesswork, just clarity. Policygenius helps you find your most affordable policy that meets your needs. They answer all your questions, handle all the paperwork and advocate for you throughout the process. Policygenius has thousands of five star reviews on Google and trustpilot from customers who found the best policy fit for their needs. With Policygenius you can see if you can find 20 year life insurance policies starting at just 276 a year for $1 million in coverage. Prioritize your peace of mind. Lock in your life insurance today. Head to policygenius.com to compare life insurance quotes from top companies and see how much you could save. That's policygenius.com we gather here tonight to

[Clark Howard]

bring women back to their rightful place.

[Hulu The Testaments Announcer]

The Testaments, A new Hulu Original series from the executive producers of the Handmaid's Tale.

[Lane (Clark Howard's wife, guest co-host)]

It's easier to accept a story than believe that the people around you are monsters.

[Hulu The Testaments Announcer]

The battle isn't over.

[Lane (Clark Howard's wife, guest co-host)]

There comes a time when you have to take action, when you have to choose your own destiny.

[Clark Howard]

Never quite as it seems.

[Hulu The Testaments Announcer]

Watch the new Hulu Original series, the Testaments, streaming on Hulu and Hulu on Disney for bundle subscribers. Terms apply.

[Clark Howard]

Okay, I'll admit it. I'm so analog on this. I have an obsession with getting paper statements from I don't have a bank account, but from credit unions and from brokerages, retirement accounts, those kind of things. And every single time sign into any of my accounts, they're trying to get me to go paperless and I don't do it. And at some point I'LL be incentivized, required, whatever, to go paperless. But there's something I will do. And you're about to hear why. You may have seen this story. I don't know where it first appeared, but I've seen several versions of it. Right now I'm looking at one from the New York Times. 35 year old physician assistant named Marta, lives in Colorado, got a weird text from Fidelity about her accounts there. And she was like, what is this about? She got a message saying that her phone number and email address had been removed from her profile and to contact Fidelity if she hadn't done it. So she logs into her account and all her money was gone. All her accounts were zeroed out. She had been saving and investing with Fidelity for decades. Started as a teenager. Don't you love that? Don't you love that when somebody starts saving for the future when they're a teenager? She did that. And it turned out that wasn't working in her favor because after decades, all her money, she started at 16, by the way. Saving just vanished in the night. So she calls Fidelity and she's on call after call with them. And finally one of the reps said, aren't you sure you shouldn't be calling Schwab, Are you sure your accounts are with us? Her records from their end had gone away and she was getting all paperless statements. So all she could see on the screen was all zeros on her accounts and no record of her money. And they, when they would pull up at Fidelity, she didn't exist. She was as upset as you can imagine, having spent decades saving money investing. And call after call with Fidelity was useless. And they finally said, well, you know what, you need to go into a Fidelity investor center. Well, she lives in rural Colorado. It was a two and a half hour drive for her to the nearest branch. She was supposed to take her stuff. She had to cancel an entire day of seeing patients go there and still they couldn't figure anything out. This is unbelievable, right? And she had no proof of any kind that she had actually had these accounts because she was all paperless. What I didn't like, and the reason I'm fixated on the New York Times story is basically Fidelity blew off the New York Times. Eventually her money was found, was restored. But after a lot of heartache and a lot of effort on her part, the money was inaccessible for a good period of time. Thank goodness she didn't need it. And Fidelity's response was so uncaring and flippant. This was a Case where Fidelity should have said, if I were running Fidelity, it's a family owned business, they're very inward. I would have said this was a terrible error on our part. We apologize for the inconvenience and we're doing everything we can to make sure nothing like this happens again. Apparently she was not the only person whose accounts just got wiped out with a computer problem. You throw into this. What's going on right now with, you know, the AI assistant, Claude has developed a software tool called, I think it's Mythos. I assume you pronounce M Y T H O s Mythos that has the ability to go into any bank system, look for cyber, what they call cyber holes, and go in and just cause absolute mischief at any bank or brokerage in the world. So am I trying to unsettle you? You bet. Am I trying to get you to put into action a plan that will give you proof of what you've got? You know it. And so odds are overwhelming that you are paperless now because of us being beaten over the head over and over again. Vanguard, with a lot of its accounts, charges you extra fees if you get paper statements. So obviously if you're with Vanguard, you're cheap like I am. So you've gone paperless. So I want you to, when your statements come in, download them as a PDF so you have them. So that if your accounts ever have to be reconstructed, you're going to need that proof. And know that this is a warning, like a shot over the bow, because this was an internal Fidelity problem that apparently affected an unknown number of people that Fidelity won't disclose. But what happens if it is a foreign actor that comes in to cause chaos in the American financial system? You are going to be relied on a catastrophic data breach or malware or whatever to prove what you had. You worked too hard for your money living on less than what you make. You have to make sure that you have put up the necessary guardrails to see that your money will be restored. No proof could end up being no way back to your money. And no, I am not telling you to put your money under a mattress. I know there are people that will think that's the best answer is not. Because what is your money earn under the mattress right now? A minus 4 point something percent per year because the head of inflation, your money needs to work for you, needs to be invested for your future. Because investing is how you outrun inflation and build wealth. Wealth.

[Lane (Clark Howard's wife, guest co-host)]

Well, that's scary. Sorry, that's terrifying.

[Clark Howard]

I mean, you, you have Heard me for how many years talk about why we have to maintain?

[Lane (Clark Howard's wife, guest co-host)]

And my inclination is to stick some money under the. You know, under the mattress, so.

[Clark Howard]

Well, what do you say about these investment accounts we have?

[Lane (Clark Howard's wife, guest co-host)]

I'm worried. I get worried.

[Clark Howard]

You're always nervous.

[Lane (Clark Howard's wife, guest co-host)]

I'm always nervous because they're just numbers on a page, and that's terrifying these days. All right.

[Clark Howard]

But it's worked out for us so far.

[Lane (Clark Howard's wife, guest co-host)]

It has worked out. Okay, so we have a question from Anonymous in Massachusetts. Okay. I've learned a lot from your show, and I really value how realistic and encouraging your financial advice is. So I wanted to ask for your perspective on my situation. I'd appreciate your advice on how to responsibly recover from a difficult debt situation and figure out the smartest path forward. I currently have two charged off vehicle loans, approximately 31,000 and 29,000. Both vehicles were involved in accidents under circumstances I was not personally involved in. Insurance denied the claims, which also meant the gap coverage didn't apply. Yeah.

[Clark Howard]

Okay. Both vehicles had outstanding loans.

[Lane (Clark Howard's wife, guest co-host)]

Yes.

[Clark Howard]

No explanation about what the circumstances were?

[Lane (Clark Howard's wife, guest co-host)]

No.

[Clark Howard]

That insurance denied the claims.

[Lane (Clark Howard's wife, guest co-host)]

Yeah.

[Clark Howard]

Okay, that sounds weird. Okay, keep going.

[Lane (Clark Howard's wife, guest co-host)]

They say altogether I'm carrying around 99,000 in total debt. And while I'm trying to stay responsible with my finances, there's no realistic way for me to pay these balances off outright. I want to avoid making panic decisions, but I also don't want to spend years frozen and overwhelmed in. In a situation like this, how would you evaluate options like settlements, payment plans, bankruptcy consultation, or credit rebuilding? What would you focus on first? If the goal is to eventually recover financially and move forward with life.

[Clark Howard]

All right, so the collateral's gone for the lenders. Both vehicles, I'm gathering, were totaled in these accidents. I don't really. I don't even know what to think. Why insurance would not pay if. Who was driving, who you let drive your vehicles or just took them. Whatever unusual circumstance, the lenders will probably be willing to reach some kind of settlement with you, because if you've got nothing, you actually have power here. So let's deal first with the 60 grand owed on the two vehicle loans, which is roughly 60% of the debt you have. The lenders will almost certainly. They'll want financials from you, understand your cash flow, your obligations, what you make, and they'll probably offer you pennies on the dollar settlements against these amounts because they know that the alternative is you could bankrupt out. Then they get nothing. So you, in this case, you owe all this money, but you're the one with the power in the situation. So payment plan, really what you want is settlement. You have to come up with the cash somewhere for whatever deal that each lender would make with you on these two vehicles. Your credit is going to suffer for seven years from having these repos, what are basically repossessions no matter what. So you make the best deal you can. But the power you have is you do have the power potentially of filing for bankruptcy. That is the real power. Now, if you contact each lender and they're really not interested in talking a settlement that you can afford against these debts. And by the way, if they do offer you a settlement, it must be in writing. Anything verbal is meaningless. That in return for paying this much money, it is payment in full against the debt. That's essentially what it boils down to. Now, if you run into a brick wall before you would consider filing for bankruptcy, I want you to go sit down with a legit credit counselor. And you can start with the national foundation for credit [e-mail] and find a legitimate credit counselor near you in Massachusetts that you can either meet with by phone, video call, or in person and see what they can negotiate for you. They are legitimate nonprofit organizations that work on behalf of you. I know this is weird, you and the creditor to get as much money as reasonable that you can afford to pay. And the idea is everybody loses less in that situation. And let me hear back from you how it plays.

[Lane (Clark Howard's wife, guest co-host)]

All right, well, we have a tip from Ann in California for you or for everybody watching and listening, she says, I have been applying what I learned from Clark's investment advice to my gas purchases. Every time I go to Costco, I fill up my tank rather than waiting until it's a quarter tank. And I consider this dollar cost averaging. So I catch the price on the way up and the price on the way down. Thanks for all that your team, you and your team do.

[Clark Howard]

And Ann is California. And I want to tell you how grateful I am to all the Californians who wrote in after I talked about the forever lines at the Costco in El Segundo and told me to go on the way to the airport to the Costco and Marina Del Rey, where the lines are crazy shorter. So I was able, near LAX to get cheaper gas and not have to stand in line to the point where I missed my flight trying to fill up the vehicle because it's a riot at this station in El Segundo. The cars are all the way out of the Costco parking Lot on a side street, going back to the main road, just in line to buy gas. Because right now, with gas in California being six bucks plus a gallon in a lot of places, people have really a big focus right now on lowering the cost of gas.

[Lane (Clark Howard's wife, guest co-host)]

All right, and we have M in Colorado. And M says, I'm traveling overseas, and the Delta app tells me to scan my passport to see if there are any steps I need to take. What does this mean? Doesn't the government already have a copy of my passport for reference? I opt out of the TSA picture scanning and just show my ID and smile to allow the TSA agent to come compare my face to my id. So my question is, should I submit my passport to the Delta app or just show up to the counter with my passport? What is Delta looking for specifically? Thank you very much. I tell my friends to call your consumer action center all the time, because that's what I would do.

[Clark Howard]

Well, em, I hope you have a great trip overseas. And Delta makes it sound in their app like you have to do the passport scan up front. Delta is trying to get everything automated at the gates. And a lot of their airports they've been trying to do where they don't have to have a human be part of the process of you boarding. You go up a camera, looks at you, decides you are who you say you are. Well, they haven't even asked who you are. They know you're checked in for that flight if it's an international, that your documents are okay, and you just go right on the plane. It's all about labor saving and time saving for Delta, so you can do it the old way. Even though Delta has trained their employees to make it feel to you like you must do the whole electronic process on the app and let them capture the image of your passport. The airlines are really freaked about having a passenger fly overseas, be rejected at immigration, wherever the plane flew to, and then having to fly you back. You get no trip, and they have to fly you back because you didn't meet whatever documentary requirement, an electronic travel authority or whatever it might be for where you're going, or a visa. And the airline may be fined 10,000 or more dollars per passenger who gets rejected at immigration. So the airlines are trying to automate the process of verifying that you have a passport with at least six months on it remaining, that you have whatever electronic travel eta, electronic travel authority you're supposed to have or visa that you're required to have before you ever are checked in for the flight. So it's like another barrier to somebody getting on a plane thinking they're okay to fly somewhere, but they're not. So it's totally up to you, M. If you want to do it. But that's what this is about. So I hope you have a wonderful time wherever Delta takes you, from Colorado to somewhere beautiful overseas. And it's being beautiful. Lane, thank you so much.

[Lane (Clark Howard's wife, guest co-host)]

Thank you. Thank you for having me subbing in

[Clark Howard]

for Krista while she's on vacay. And you're gonna be with us for several more podcast days.

[Lane (Clark Howard's wife, guest co-host)]

Sounds fun.

[Clark Howard]

What do you think of it so far?

[Lane (Clark Howard's wife, guest co-host)]

Well, I can't take Krista's place, but it's fun. I'm having a good time.

[Clark Howard]

Well, that's good. And what we're all about is you. We're all about you being empowered with knowledge so that you can save more, spend less, and never, never, never, not ever get ripped off. And coming up on Friday, you get to hear how you feel. I ripped you off in this week's Clark St.