When John, from North Carolina, called into "The Ramsey Show," he revealed that he and his wife were facing nearly $1 million in debt after closing down his business. A mix of loans, IRS taxes, credit cards, and a mortgage left the couple overwhelmed — and worried about their financial future.
Dave Ramsey, joined by his daughter and co-host Rachel Cruze, broke down the numbers and offered urgent advice, warning John that the debt was about more than money.
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Breaking Down the Debt
John explained that his obligations came from several sources:
- $250,000 in Small Business Administration loans tied to his former business
- $350,000 owed to the IRS
- $96,000 in credit card debt, consolidated into a single loan
- $250,000 left on his mortgage
- $23,000 in legal and accounting fees
- $8,000 remaining on a car loan
While John and his wife owned a home worth about $550,000, they had already sold other assets — including land and a rental property — to try to stay afloat. His current income had recently dropped from $260,000 to $140,000, with his wife earning an additional $20,000 annually.
‘This Stuff Will Destroy Your Marriage'
Ramsey didn't minimize the financial burden. He told John that his situation mirrored his own experience decades earlier, when he filed for bankruptcy after losing everything.
"I remember being right where you are," Ramsey said. "This stuff will destroy your marriage if you don't fight for your marriage."
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He emphasized that John and his wife needed to see themselves as a team, locking arms and facing the challenge together. According to Ramsey, fear and shame often compound financial struggles, straining relationships even more than the debt itself.
Prioritizing Family and Basic Needs
Ramsey urged John to focus on essentials first: food, utilities, transportation, and housing. In his view, no creditor should come before a family's basic needs.
"We're not going to jail and we're not going to go hungry," he told John to reassure his wife with these words. "Food on the table trumps anybody else's request. Lights and water kept on trumps anybody else's request."
By addressing core necessities, Ramsey said, John could reduce his wife's fear and begin rebuilding his own confidence.
Facing Hard Realities
Ramsey was clear that John's path forward might require painful choices. He advised consulting a bankruptcy attorney to fully understand his options, particularly because the IRS debt — unlike credit card or SBA loans — cannot be discharged through bankruptcy.
"You may end up selling the house to clear the stinking IRS," Ramsey cautioned.
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While the math looked daunting, Ramsey reassured John that his worth was not defined by his business failure. He reminded him that recovery was possible, even if the journey ahead would be difficult.
A Final Word of Support
Ramsey closed by encouraging John to protect his marriage and prioritize his family above all else. "You're a lot better than you feel about you right now," he said, adding that John must take care of his wife.
John agreed, and Ramsey offered to connect him with a Ramsey coach to help guide the couple through the crisis.
For many listeners, the exchange is a sobering reminder: financial setbacks can feel insurmountable, but maintaining unity and perspective may be just as important as the dollars and cents.
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