I'm $200,000 In Debt and Unemployed

Summary

Podcast Summary: "I'm $200,000 In Debt and Unemployed" – The Ramsey Show Highlights

Release Date: February 26, 2025

In this compelling episode of The Ramsey Show Highlights, a distressed caller reaches out seeking guidance amid a overwhelming financial crisis. Hosted by the Ramsey Network, the episode delves deep into the caller's substantial debt, the challenges of managing multiple auto loans from a failed business venture, and the actionable advice provided by experts Rachel Cruze and Christian Kamel to navigate these turbulent financial waters.

---

1. Introduction to the Caller’s Financial Distress

At the outset of the episode, a distressed individual (referred to as Caller B) shares their predicament:

Caller B [00:06]: "I am terrified, to be honest. I'm expecting my first child soon, and congratulations. Thank you. I am in a very big hole. I'm considering filing bankruptcy just because that's kind of what's been recommended to me by a couple friends. But I'm just more so looking for guidance because I don't really know where to start, what to do, or if that's even the best option for my situation."

This candid admission sets the tone for a detailed exploration of personal financial crisis and the avenues available for recovery.

---

2. Detailed Breakdown of Debt

The conversation progresses as Caller B outlines the extent and nature of their debt:

Caller B [00:41]: "A little over 200,000."

Breaking down further:

• Credit Cards: $25,000
• Student Loans: $14,000
• Delinquent Bills and Other Debts: Approximately $161,000, including auto loans.

---

3. The Burden of Auto Loans from a Failed Business

A significant portion of the caller's debt stems from auto loans acquired for a car rental business that ultimately failed:

Caller B [01:49]: "So I had a car rental business that started last year, but it's pretty much a failed business at this point because I'm not really making any revenue."

The caller elaborates on the challenges faced in selling the fleet:

Caller B [02:57]: "The first one I owe 24,000... the second One is about 28,000... number three is 37,005... number four is about 40,000... and then the final one is 42,000."

These figures highlight the precarious position of being "upside down" on multiple vehicle loans, where the owed amount exceeds the vehicles' worth.

---

4. Expert Analysis and Advice from Rachel Cruze and Christian Kamel

Rachel Cruze and Christian Kamel respond with empathetic and strategic advice aimed at alleviating the caller's financial strain.

a. Evaluating Vehicle Equity

Rachel Cruze [04:20]: "Carmax value is like the probably the lowest value you would get for them if you sold these private sale, you might actually break even."

This insight underscores the potential benefits of seeking private sales over traditional dealerships to maximize returns and reduce being upside down on loans.

b. Strategic Selling of Vehicles

Christian emphasizes the importance of acting swiftly to prevent repossession:

Christian Kamel [06:17]: "I would took less to get them out quicker so that it doesn't get repoed because then you have nothing to offset the debt."

He advocates for potentially accepting a lower sale price to expedite the process, thereby mitigating further financial damage.

c. Focusing on Immediate Debt Reduction

Rachel suggests prioritizing which debt to tackle first to create a domino effect of relief:

Rachel Cruze [07:05]: "If you can just really quickly get $3,000 saved and just focus on that one, even clearing one of these immediately is going to rock your world."

This approach recommends starting with the least upside-down vehicle to gain early victories, boosting morale and providing the momentum needed to address remaining debts.

---

5. Steps Forward and Support Offered

To ensure the caller receives comprehensive support, the hosts outline actionable steps:

• Budgeting: Emphasizing the importance of detailed budgeting, referencing the EveryDollar app mentioned at the beginning of the episode.

• Financial Coaching: Offering the caller access to a financial coach for personalized guidance:

  Christian Kamel [07:46]: "Some extra money, Maya, if you stay on the line, Christian's going to pick up, and we're going to get you with a financial coach."

• Income Generation: Encouraging the caller to explore additional income streams before the baby's arrival to aid in debt repayment.

---

6. Conclusion and Encouragement

Despite the daunting debt, the episode concludes on a hopeful note. The hosts reassure the caller that with strategic action and support, financial recovery is attainable:

Rachel Cruze [07:41]: "There is a lot of hope in that situation."

This message of optimism serves to inspire listeners facing similar challenges, highlighting that proactive steps and expert advice can pave the way toward financial stability.

---

Key Takeaways

• Assess Asset Equity: Regularly evaluate the value of assets versus owed amounts to make informed financial decisions.

• Prioritize Debt Reduction: Focus on eliminating the most manageable debts first to build momentum in debt repayment.

• Seek Expert Guidance: Utilize available resources and professional advice to navigate complex financial situations.

• Stay Proactive: Act swiftly to prevent further financial deterioration, such as repossession or additional fees.

---

This episode of The Ramsey Show Highlights provides a realistic portrayal of severe debt challenges and offers practical, empathetic advice to help individuals regain control of their financial lives. Through detailed breakdowns and expert strategies, listeners gain valuable insights into managing large debts and the importance of seeking support during financially tumultuous times.

Transcript

[A]

Brought to you by the EveryDollar app. Start budgeting for free today.

[B]

I am terrified, to be honest. I'm expecting my first child soon, and congratulations. Thank you. I am in a very big hole. I'm considering filing bankruptcy just because that's kind of what's been recommended to me by a couple friends. But I'm just more so looking for guidance because I don't really know where to start, what to do, or if that's even the best option for my situation.

[A]

Yeah, well, tell us more. How much debt are you in?

[B]

A little over 200,000.

[A]

Oh, wow. And what kind of debt is that?

[B]

So it's kind of a mix. About 25,000 of it is strictly credit cards. 14,000 is from student loans, and then the remainder is pretty much delinquent, like previous bills that I am behind, high on or kind of got charged off or auto loans. I.

[A]

Tell us about the auto loans.

[B]

Okay. So I had a car rental business that started last year, but it's pretty much a failed business at this point because I'm not really making any revenue. And I've considered and tried multiple times selling the vehicles and, you know, trying to trade them in how many? But no one. There's five different ones.

[A]

Can you tell. Can you go through and tell us the story on each of them, like what you owe on it and what it's worth?

[B]

Yes. So there's five different ones I can put up if you give me one second.

[A]

Sure. So what were you doing, like Turo or something?

[B]

Yes.

[A]

Okay. And so my guess is you pulled debt on all of these vehicles with the intent to rent them, and they're. You ran up the miles on them, so probably they depreciated very quickly, but you just weren't making the spread that you thought you would, is that what.

[B]

Right. One of the vehicles actually started out as a personal vehicle, but then I eventually, of course, used it for the business side of things once I resigned from my. My previous job.

[A]

Got it. Okay. Okay. So that makes sense because before when you said, Hey, 25, 000 credit cards, 14, 000 student loans. The rest is in, like, other stuff. I'm like, gosh, that's like $160,000. In other. Okay, it makes sense. Now that it's cars. Do you have that info? If not, we can move on to the next thing.

[B]

I do have all of the cars and how much is owed on each one, but as far as the value of them, I kind of got the information a little while back. So it's not as up to date.

[A]

Okay, well, as. As much as we can go through them and kind of give you some insight. So the first car, let's call it car number one. What you. Okay, what do you owe on it?

[B]

The first one I owe 24, 000.

[A]

And what do you think it'd be worth? Private sale.

[B]

What I've tried or what I got last information on was about 20, 000.

[A]

Okay, and how long ago was that information?

[B]

Probably about three to four months ago. And this is for all of them. About three to four months ago.

[A]

Okay, so one is 20. Your $4,000 upside down. Okay, not as bad as I thought. What's the next one?

[B]

The second One is about 28,000. Is what's 28,000. Seven is what's owed on it. Do you want me to keep going on the other one?

[A]

You said you owe 28,000.

[C]

You can get 28 from it.

[B]

As far as that one's worth, it's probably a couple months ago. It was around 25 is what it was worth.

[A]

Okay, what about car number three?

[B]

Number three is 37,005.

[A]

Okay.

[B]

What I was told it was worth is about maybe 33ish and some change.

[A]

And just for clarity, what did you go to, like a Carmax type place? Where'd you get that information?

[B]

Correct. That's where I got them all previously appraised.

[A]

Okay, that's good to know. The good news is what I want to encourage you, like before we even get through the list. The good news is Carmax value is like the. Probably the lowest value you would get for them if you sold these private sale, you might actually break even.

[C]

Yeah. Yep.

[A]

So keep going. Let's hear number four, Number five real quick, and then Rachel and I will give you our advice.

[B]

Okay. Number four is about 40,000 that's owed on it. And I. That's the one. I really don't know what it's worth, but if I'm guessing, It's probably about 5,000 upside down, but I'm not 100% sure.

[A]

Okay.

[B]

And then the final one, the final one is 42,000. Two is what's owed. And the last time I got it appraised, it was about 6,000 upside down.

[A]

Okay.

[C]

Okay.

[A]

Okay. So the good news is, I really think for sure the first three, if you sold on private sale, you could probably break even or get really, really close. But I think if I were in your shoes, and I'm not saying this, this is not a sexist comment by any means, but I'd be Getting with whoever I know that has a little bit more cojones in this area and like more expertise. Like I'd be calling it my dad and brother be like, help me sell these cars when these app.

[C]

Yeah, I just added this up. That's $171,000 in cars.

[A]

Yeah.

[C]

And if in worst case scenario, you're probably 15, $16,000 upside down. So this, this, I mean, I would be making. I would say I'm getting these. I'm getting rid of these in the next two weeks.

[A]

Yes.

[C]

I mean, like I would be putting them everywhere, all over the Internet, anywhere I could. I have some great cars and I'm selling them. Get them out of my life. Because that frees up. I mean, I can't imagine the car payments you're paying every month on these, Maya. I mean, like, that's. Yeah, I mean, I. That would be my number one. And so there is a lot of hope in that situation that 100%. Yeah. The majority of all of these. I mean. Yeah, you could be.

[A]

Have you tried to sell them and not had luck? Is that what's holding you back?

[B]

Yeah, they're also a few of them are like extremely tired to the point where they're kind of out for repossession. So it's like I'm trying to get rid of them.

[A]

So they're back payments.

[C]

Okay.

[A]

Okay.

[B]

Yeah.

[A]

Okay.

[C]

Which would make me get that. And I would took less to get them out quicker so that it doesn't. They don't get repoed because then you have nothing to offset the debt. So even if you have to take less, I would. I mean, this is more of a desperate situation because of what you're in. You know, Maya, it's kind of like, you know, with, you know, with people that are behind on their mortgage and it's like you'd rather sell it quickly than get foreclosed on. I mean, it's kind of the same equivalent.

[A]

So the hard thing though is you've got to be able to give them the title. So how are you going to close the gap from the 1. Do you know what I'm saying? If you take less, how are you going to close the gap so that you can actually sell it free and clear? Do you have any money anywhere saved?

[B]

I only have, as of today, probably about $1,000 to my name.

[A]

Okay, so what I would do then with that thousand dollars, because one breaking loose on one of these is going to help you avalanche through all of them. So the one that you was the least upside down was number two, the one that you owed 28,000 on that was worth 25. If you can just really quickly get 3,000 bucks saved and just focus on that one, you even clearing one of these immediately is going to rock your world. Yep. You know, absolutely. And so that's what I'd focus on. And then after that, they're going to go like dominoes because it's going to clear up that payment. You're not going to feel the stress of it. And so focus on one at a time. But there's a lot of hope here, like Rachel said.

[C]

Yep. For sure. And what you can do to make money between now and when baby comes is going to be as helpful as possible, too.

[A]

That's right. That's right.

[C]

Some extra money. Maya, if you stay on the line, Christian's going to pick up, and we're going to get you with a financial coach. She'll even walk with you through some of this because there's a lot here. And with a baby coming, I know it's just life is difficult, so hopefully that helps. Thanks for the call.

[A]

Create your free everydollar budget today. The simplest way to budget for your life.