My Girlfriend Is Considering a Debt Relief Company

[Music] brought to you by y refi refinance your defaulted private student loans today at y rei.com Ramsey okay U make a long story short um I'm in between baby step one and baby step two you know things going good stuff stuff breaks spend my thousand doll gotta rebuild baby step one uh I got my girlfriend she's kind of starting to listen to you to we want to be married have a family she has $21,000 in credit card debt mmhm she she found this company a credited debt relief they offered us a payment of $342 a month for 48 months that's to pay off the credit cards the problem is that's only $16,400 I don't understand how this could work okay um because it's the same as filing bankruptcy it's going to destroy her credit here here's the way they work stay away from them stay away from them but here's why okay the way they work is when you sign up with them they take over all of your payments and the first thing they do is they stop making any payments and they let all the credit cards go into default if they're not there already and uh so they they go into default and the credit card companies then will settle a bad debt now she will be in collections on every one of them and then they'll settle the bad debt for a lesser amount than is owed and set up payments on that and that's how they know that they can get you a $166,000 deal by the way if you did this yourself and just quit paying for a year which I don't recommend same thing would happen then you can call them and settle for probably a quarter on the dollar so you probably settle all this for five or 6,000 bucks uh but that is also not paying your bill when you're able to number one number two you've completely destroyed your credit I mean nasty bad nasty you got a bunch of outstanding bad debt at that point and that's the way these people work and it basically does the same thing to your uh credit as filing Chapter 13 Bankruptcy does you can do the same thing with Chapter 13 Bankruptcy you can file with Chapter 13 Bankruptcy if you qualify for the bankruptcy under guidelines then you can pay a percentage not 100% but you could pay in this case you said 16 out of 21 right yeah yeah you could pay so you could pay 5 cents on the dollar you could agree to pay 75% to my unsecured creditors in my chapter 13 that's not 48 months that's 60 months but um they could they could do the exact same thing thing there and it'll do the exact same thing to her credit only Technically she's filed for bankruptcy and the other one she didn't technically file for bankruptcy but it does the same amount of damage if not more to your reputation and to the process plus you're screwed you're in debt $21,000 for 48 for 4 years when you could have paid it off by next Christmas working five jobs yeah why can't you just pay it off why can't you just work more and pay it off tell us more about that what's the income uh I work for the railroad I'm on 12s right now which is legally the most I can work um she's a teacher and she's doing starting to do Amazon flex but she has a daughter love to death what she teach you know uh she's like the director of a bunch of different um like dayc carees she's a she used to be a daycare teacher but she's now like the director of a bunch of those she makes about 55,000 a year okay all right now instead of doing that now that I've explained to you and answered your question what it does I'll give you a suggestion rather than doing that okay and um what I'll do is I'm going to give you Financial Peace University and every dollar Plus for both of you she's going to have her account you're going to have your account cuz you're not married okay and I want both of you to get on a detailed tyght budget don't spend any money on anything live on beans and rice no eating out no vacations and working extra if she has a teaching degree and a talent in a particular subject like math or English she can do tutoring and make more than Amazon Flex okay if she can get some students from the local elementary or local junior high or whatever and she teaches math in the afternoon or the math in the evenings after she gets home I mean you can make $30 to $50 an hour doing that yeah child care too and your kids sitting in the other room while you're doing this they come to your house that's a great idea yeah I've got a friend that's a reading specialist that makes Bank while her kids sit in the other room and uh on the side and I mean it's serious money there because they got reading problems and man she's wow it's really cool stuff so anyway yeah that's what I would add to this and say all right we're going to increase our income we're going to tighten down everything we're going to have a new thought we're going to get all these credit cards tonight and have plastic surgery and um we're going to pay them at 100% we're going to pay them so fast that they're in our rearview mirror and we get a life but 48 months man that's like that's ridiculous that's like saying I'm going to jail you get to go to jail for 4 years and you be GE just get to you know you bring the food and slide it under the bars you know no thank you I don't want to live like that I want to get I want she no man the goal needs to be if you can find an extra if you can make a goal that we're going to make or she's going to make 1,700 extra dollars find it every single month what does it look like is it Amazon Flex is it tutoring is that pays it off in one year yeah Is it child care is it and is it pay is it a cut in the budget she makes 55 already yeah yeah so um yeah that that's the kind of stuff we're doing Dan so we're going to help you with that um it's the hard way but it's the fast way it's deep sacrifice but it's in your rearview mirror and you get to have a great life on the other side of it versus signing up for a long slug through the mud that's what we're doing I don't I'll and at the end of it at the end of the story you're still screwed because you just completely destroyed everything as far as credit goes so she's probably going to have some dings on her credit probably already does but nothing like what you'd be signing up for if you go to those comp type of a company so we do not recommend them at all hang on the line uh the team will pick up and we will get you signed up for Financial Peace University get her signed up you guys you can go through the class together um but you need your own separate budgets because you're not married yet and you live you keep your finances separate until you're married so good question sir I appreciate you checking on her behalf wow those things are uh you see them on cable TV oh and man there's a couple of them have been fined like 400 I mean one of them got fined like was it it can't be 400 million was that the fine was some ridiculous one that uh Tom selich endorsed and the Federal Trade Commission hammered them with fines a couple of years ago because they just they're they're it's just a scummy side of the world yeah it's scummy and I don't I don't like situations where you take control from you and give it to someone else to do things on your behalf and what they're doing is acting like I didn't pay my bill so that they can get a discount yeah I mean that and trashing my stuff in the meantime but we're we're in the uh we're in the debt relief business just like Dave Ramsey uh no you're not no you're not it's not not even not even close not even close to the same thing so yeah stay away from um those things and they call themselves uh also debt consolidation yeah and it's not debt consolidation all you're not consolidating debt consolidating debt is when you get one debt and pay off all the others with the One debt well you don't pay it off you move it to the One debt but that's like a home equity loan that's debt consolidation but not paying them and you paying these goobers one payment that's not consolidation at all and it's really not debt relief no it's not relief it's um well at at the end I guess it is in one sense but GH wonder what the percentage of people that complete it is probably pretty low that's a good question that would be interesting to look at now you don't finish it you're really screwed why refi refinances delinquent private student loans for struggling borrowers learn more at yy.com Ramsey