He Went From Millionaire To Broke in 8 Years

In today's digital world, you need ID theft protection that actually works. Protect yourself at xander.com. >> I kind of did what u you probably did a long time ago. I started a business and it was booming. uh made my first million in a couple of years and um it just kind of went it just my financial life just spiraled out of control and uh now I don't know if I should go bankrupt and um figure out a way how to get back on track. Um I haven't done any any um payroll taxes and I owe since 2017 2018. Um, I also haven't filed taxes since I was in 2017, 2018. And, um, credit cards. I have over $70,000 in credit card debt. Um, I have a commercial line of credit, which is another 30,000 that I owe the bank. Um, I took an SBA loan out, which is the emergency funding. This is during the uh PPP uh time. Um sorry, >> I might have it's the uh >> the one for COVID. Um yeah, qualify for that because I didn't file my 2021 or 2020 taxes. So, I had to actually get a loan out to keep my um employees on board with me. And that's $132,500 there. So, alto together it's well over $350,000 in debt. Is your business still open? >> It is. I just uh had to let go of all of my employees and um I had to minimize all of my accounts. Uh currently I think I have like four or five accounts that I drive to every single night. Um my industry is janitorial business. Um so yeah, it's uh it's tough. Um >> so what are you making with the three or four accounts? So, it's 9,777. Uh, that's per month. And, um, I did the math on all my expenses. Uh, they equal out to about 7,877 a month. >> Are you married? >> I'm engaged. >> Okay. When do you plan to get married? >> Oh, Jesus. Not anytime soon. >> Okay. All right. What does she make? >> I'd probably say around the 3,000 a month. >> Mhm. Okay. How old are you? >> 20. No, 38. Sorry. 38. >> All right. Well, this is a really, really scary situation. And it didn't happen suddenly. It's happened pretty gradually. Um, >> absolutely. >> So, really, really bad news for you that apparently you're not aware of. 941 payroll taxes are not bankruptable and neither and neither is the IRS. So all of your taxes are going to be there if you file bankruptcy. Um I'm not sure if this SBA loan is bankruptable because it's COVID related. It might be. Um certainly the credit cards and the line of credit are uh bankruptible. Uh but you're not that you know >> the problem doesn't go away with bankruptcy is my point. >> You still got a massive problem. And um so the first thing I need you to do before we even talk about bankruptcy is when you get off the phone, I want you to go to ramiesolutions.com and click on tax ELPS endorsed local providers. find the tax person in your area that we are that's Ramsey trusted and I want you to sit down with them and develop a strategy to get caught up on your filings. Typically, when you have not filed this far back, um they'll take 3 years tax returns. You don't have to go all the way to 2017 and um and then you'll of course owe those taxes and I don't know what they'll do with the potential owings from those others. The 941s, however, you withheld taxes on your employees, right? >> Right. >> And then didn't pay it. >> Correct. >> Yeah. That's a trust account and those live forever. >> That's and that's the IRS puts that in the extremely serious bucket. >> Yeah. >> That one is like really scary. So, you need to develop a strategy with a tax person on the 941s and on getting your returns caught up because here's what's scaring me. Um, apparently you didn't realize, not paying income taxes is not a criminal offense. Not filing is a criminal offense. >> Correct. >> 2561 people went to jail last year. They put people in jail for not filing. Okay. and you have not filed a lot. So, I want you but but I I've never in 35 years of doing this seen someone actually get prison time or get criminally charged. If they come forward, but if the IRS comes and finds you, you're going to be screwed. So, you need to take care of this proactively tomorrow. You need to meet with a tax tax person and start developing a game plan on your back taxes and your back 941s. Then you can start looking at whether or not we, you know, what I would do is just not pay the credit card and cut it up. I would not pay the commercial line of credit and I would not pay the SBA, which by the way is what happens if you file bankruptcy, right? >> Yeah. >> They don't get paid. So, I would not pay them. And I would take all of the cash flow above living expenses and start dumping it first and foremost on the 941s and then secondly on whatever back IRS taxes you have. And if one of these others comes after you and tries to shut you down or foreclose on something or whatever, that might force you into bankruptcy. But we're going to address the non the things that are not bankruptable, which is the IRS in this case, um before we bother with a stupid line of credit or credit card. >> Yeah. And then you go to working as hard as you can work and you properly pay and file your taxes every day for the rest of your life from this day forward. >> Oh yeah. >> That has affected your ability to do business because it's a monster in the closet. >> Absolutely. >> Yeah. And you you wake up in the middle of the night and you don't know why. I know. It's called stress and you're hurting. >> You're hurting and you're scared. >> Yeah. Yeah. It's terrifying. So that that's what I would do. Are you in a good church by chance? >> I I I don't go to church. I do believe in God. I just don't have the time to. I work. >> Yeah. You you don't have the time not to. Now you you need a you need a relationship that is above and beyond hard work. You're not afraid of hard work. You've just made a mess and you need some people in your life that love you regardless of how messy you are. And um that that's the place to get it. So, I'm going to I'm going to suggest you plug into that because it's the the answer to being terrified is to be in community and have friends. Lonely people are super terrified more than people who have friends in their corner. Make sense? >> Absolutely. >> Yeah. So, get get some people in your corner. I I have a homework assignment for you, Carlos. We don't have time to unpack it, but what I would have loved to have sat with you on is to identify what was going right. In other words, what was working when you were really killing it? You started the call saying, "We had some great success." I think you mentioned over a million dollars of revenue. I think you need to at some point spend enough time to write it down and say, "What was working? What was I doing right when we were do when we were crushing it?" And in times of failure where businesses can go up and down, one of the great exercises is to identify that. Now, here's the reason for that. >> Go back to doing that. >> That's right. What has to change? What do I need to do in order to start doing that again? Because that was a formula that worked. And I think right now, you're in a desperate situation. And so, if you can get some clarity through that exercise and start to repeat that again, that's your best chance to make more money and dig yourself out of this. And so Carlos, when you're working really, really, really hard and you're managing the money, we're going to buy food, lights, and water, shelter, transportation, and pay taxes, back taxes in your case. And that's all you need to be doing right now. complete focus on that and complete focus on any new accounts you can add and start growing the business back again with a proper accounting system that keeps you caught up on these things because where you are is terrifying. I'm sorry, man. You call me back if we can be more help as you're fighting through this. We'll help you any way we can. The best ID theft protection comes from Xander. Real monitoring, full restoration, no fluff. Learn more at xander.com.