I Borrowed $178,000 to Spread Fertilizer

Brought to you by the every dollar app. Start budgeting for free today. I'm 22 years old and I started a business last year and it's kind of just went backwards on me where I'm to the point now where I've got a piece of equipment that I'm sitting here staring down the barrel of a gun where they're basically probably gonna have to come repossess it the first of April. So you started what kind of business? Um, custom dry fertilizer spreading business. And so you bought a, what is the equipment? It's a applicator that applies dry fertilizer on field. And what, how much do you owe on it? Uh, 178,000. My annual payment on it's 40, uh, $40,000 a year. And everything's just went backwards. I'm confused why they would loan a 22 year old, $178,000 on a piece of farm equipment. Well, because I had a way to get into the business and then since then it's just went backwards. Since then I had the money for a down payment, put the money down. How much did you put down? 12,000. But still, I mean, you were not even, were you in the business already? I've been in agriculture business all my life. You're 22. Yes, sir. Yeah. Okay. All my life is not long. Um, I've been doing it ever since I could, I know, honey, but I'm talking about what moron loans you $178,000 with a $12,000 down payment. When you're 22 years old, there's nothing, there's nothing that says this deal should have happened. Leland, you can't turn around and sell it. I've been trying to, and I've tried selling it with an auction company, but they wanted me to put a hundred thousand dollars up front before they'd even sell it. And so you had grand plans of spreading a lot of fertilizer. What happened? Um, I put my name out within a hundred mile radius and the farm economy, the way it is fertilizer prices is high and there's not a lot of people doing dry. They're all going different routes. Oh, I'm sorry, hon. This is scary, isn't it? Uh, yeah, it definitely is. It's definitely scary to be sitting here in this position. It's just been haunting me ever since. I guess. All right. Well, I went broke when I was 28 and I had more zeros on the end of my stupidity than you do. So I got your beat. Um, right. Cause this was straight up stupid. And the guy that loans you the money deserves to lose a hundred thousand dollars, whatever company did this. What's the name of the company? I can't remember off the top of my head. And I, you owe them $178,000 and you don't know the name of the company. So I do is on a piece of paper at my house and I don't have that information in front of me. You bought it at a dealership. Didn't you? What brand is it? John Deere. Yeah, I guess so. So you don't know John Deere incorporated the money. No, no, absolutely not. And my plan was, you know, do 10,000 acres a year that can be done extremely easy. And I found out the hard way that it has not been near as easy as what everybody said it was supposed to be. So the moral of the story is we don't borrow money to start businesses because things never turn out exactly the way they're supposed to in business. That's the rule of business. And so that's a lesson that sadly you have learned. The only good news is you learned it at 22. I learned it at 28. So I had the rest of my life to not do that stupid mistake again. And you have the rest of your life to not do the stupid mistake again. So the next time you have a bright idea and someone wants to loan you money to do your bright idea, you tell them no, right? Yes, sir. Okay, good. All right. So we've learned our lesson. Now let's walk through it. I'm so sorry, hon. Um, so I do not know a way around this because I don't know your world. I'm still just sitting here aghast that someone loans you $178,000 to spread fertilizer that there's just so many fertilizer jokes that I could weave into this, but, um, yeah, it just kind of, they just, they just roll off the mind right now, but anyway, the, um, the spreading of fertilizer is pretty thick here, but the, um, uh, so let me tell you what I think is going to happen and how you can handle it. Okay. I think you're going to get repoed at the first of the month. I don't know how to tell you to stop that with anything that's reasonable. One thing you could stop it with as a chapter 13 bankruptcy, but that's a, or a chapter 11 bankruptcy, even in this case, but that's a pipe dream because the business idea is dead and there's no way to revive the cashflow. If you could revive the cashflow starting two months from now, you know, we could delay the repo and put it by putting it into a bankruptcy, but I wouldn't do that here because I think this business idea is just a swing and a miss, right? So I think they're taking it at the first of the month. Okay. Then what's going to happen is they're going to sell the piece of equipment for X number of dollars at that same auction. And then they're going to come knocking on your door for the difference it's called the deficit. Okay. So let's play pretend let's play pretend. And it's 178,000 owed and they sell the piece of equipment for a hundred thousand and they come see you for 78,000. You're 22 years old. You don't have any money, right? That's where we're going to be. It's probably going to be a year before they knock on your door, wanting the difference. It's not going to be soon. Okay. And when they do, uh, normally what happens is they push you and push you and the person files bankruptcy and they get nothing on their 78,000 in our example story here. Okay. However, you have a year to prepare for this battle. And were you to save up during this coming year by working your little tail end off, uh, $25,000 and you offer them $25,000 as settlement in full on the deficit, they'll probably take it because they're used to getting nothing back. We settled deficits on our car repos at 20, 25 cents on the dollar every day. I've not done it much on farm equipment. So I don't know that world, but it's probably pretty close. And the reason we're able to settle those deficits at that is because they very seldom collect anything. Usually the person files chapter seven bankruptcy, they get a big goose egg. Zero, especially when you look at, look at it through the creditor's eyes, not to put you down Leland, but looking at it from the banker's perspective, I'm trying to get money out of a 23 year old who's broke the likelihood of that's close to zero. Right? So if he stands up and offers me 25 K, I do a little happy dance and take it if I'm the banker, you follow me. So what are you going to do for a living now that your life is starting over, sir? I mean, I'm pretty much self-employed and don't have, I mean, I don't have a college degree. And what are you going to do for a living, sir? You're going to farm. Whose farm are you farming? Uh, some, some friends. You're going to work on a farm for someone else. Yeah. And what does that pay? It just depends sometimes $25 an hour, depending on who you're working for. Okay. And then ask yourself, what do I want to be doing when I'm 32, that I'm a millionaire and it's not $25 an hour work. I'll help you with that. Yes, sir. And it's not going into debt, 178,000 to spread manure. Oh no, this was dry. I'm sorry. Okay. But anyway, you see the point. Yeah. So you got to figure out what am I going to do next? Because one of the things that I discovered when I went bankrupt, because I couldn't turn it around the way I think you actually can turn it around. If you'll work like a crazy person and stack cash and keep your living expenses very, very low, I think you can scratch up some cash and settle the deficit when they do come after you one or two years from now, don't call them, wait for them to call you. And in the meantime, build a war chest and then settle it in full in writing settlement. And I think you can get through this. I really do. And then you could just look at this in the rear view mirror is that dumb thing I did when I was 22. I, I can look at my life in the rear view mirror, that whole series of dumb things I did when I was 28. Yep. You can, you guys paid off, um, you know, hundreds of thousands of dollars because of dumb things you did in your early twenties. A lot of stupid things. Yeah. And so it's, you know, you're talking to the choir here. Okay. Singing with the choir. So, but I do want you to develop a future and a plan that doesn't involve a hail Mary. You threw a hail Mary into the end zone and got intercepted. Don't do that again. Learn, learn from the mistake and we'll walk with you. Anything you need, Leland, you call me and if you want to save up that money and when they mess with you, you call me, I'll T I'll walk you through it. I'll show you how to negotiate with them. Create your free, every dollar budget today, the simplest way to budget for your life.