I Owe $80,000 In Taxes and Don't See A Way Out

Brought to you by the EveryDollar app. Start budgeting for free today. I've got about $80,000 in tax debt and $50,000 in credit card debt, and I'm wondering if I should file bankruptcy and just kind of start over. What's your income? Uh, $70,000 and then combined with my wife, like around $100,000. And that's your total debt that you just gave us? Yes. What is your mortgage or your rent? Rent is $2,200. What's your take-home number every month? Um, take-home for me is probably like $4,400. And for my wife is, uh, she, her job's a little bit seasonal. It's she cleans Airbnbs, but it's probably around like $3,000 a month, at least on average. And what's making you think that bankruptcy is the only way out of this? Um, because it just seems like such an insurmountable number. And now the taxes are like racking up interest and penalties and the credit cards are, you know, I used to be able to do balance transfers and kind of keep it under control, but it's just gotten out of control. And so now, you know, it's just high interest. Uh, I can make the minimum payments, but it just seems like I'm never going to be able to pay it off. Sure. What do you do for a living? Uh, maintenance tech for, uh, apartment buildings. Okay. And what does your wife do? She cleans Airbnbs and does some caregiving. Okay. I'm going to start right here and go right to what I think is one of the key things we need to address today is what is the amount of income after taxes, if Jade and I could just put it into your account today? Okay. What amount of money would allow you to start making progress and feel like you're actually getting momentum? You mean like how much money? Let's just assume I'm giving you extra income after taxes every month. I'm asking you, do you know how much money extra a month, if I gave it to you in payments, what would make a huge difference for you where you go? Not only am I taking care of it, but I'm actually starting to knock this debt down. I'm making progress. I see momentum. What's that number? Additional income. I mean, if it's 150 or 130 grand total, um, I don't know, like that's the problem. You know, those free samples at the store that are up for grabs for anyone. Well, that's basically what's happening with your personal information. Online data broker sites, collect stuff like your address, phone number, email, even your family's information, and just post it online for anyone to grab. And that's why I use delete me. They remove your personal info from hundreds of data broker websites and keep it gone. Stop letting random websites treat your data like it's free samples. Get 20% off your annual plan at join delete me.com slash Ramsey. That's the problem. You see what I'm saying? That wasn't a trap question, but I don't think you're on a budget. Am I right? Correct. So the reason I ask you that is because that's part of the issue. Your wife needs to be working at minimum 40 hours. Seasonal work for people who are broke and are worrying about bankruptcy is not an option. There is no seasonal work. You work in every season. You're working 60 hours a week for a season, right? You said that like that's interesting, but like you didn't believe me. Um, I mean, we have a 14 year old. I've, you know, I've encouraged her to get more of a regular job for many years. Why are we talking about the, yeah, but the 14 year old is self-sustaining. The 14 year old can let themselves in from school. I've, I've raised three kids. My youngest is 18. Now I'm not worried about the 14 year old. That's an excuse. Why isn't she making more money? I'm just telling you where she's at. I get it. But she's like resentful of the fact, even that she has to work at all. Well, that's a problem, but I'm sure you called us for financial advice and you guys need more income. So let's shift. All right. I can't solve the marriage problem. I can't solve that issue. But I can tell you this. I can tell you $3,600 changes your life. Without question. $3,600 a month. So let's shift it to you. Okay. Because she's resentful for working and you're calling us. She's not on the phone. So with the skills you have, can you pick up overtime or go to a second job? And what this basically means is roughly 2,500 bucks a month or even 2,000 bucks a month would make a big difference. Can you do that, Josh? I could. Yeah. Well, that's our sport. I've worked two jobs, many points in my life, but still like, so say I came up with an extra three grand a month to pay down this debt. Even if I'm putting every dollar of that, it's 36 grand a year. It would still take me, what, five years, four or five years. It's going to take you between three and four years if you go intensely to pay this off. Right. So my question is, as an alternative to that, what if I just filed for bankruptcy, got rid of as much of this debt as possible? What if I told you I spent seven and a half years paying off $460,000 of debt and I didn't file for bankruptcy? I think that's awesome. I'm just kind of, I'm older now. Why are we different? How old are you? I'm 47. Bro, don't be bringing that to me. I'm 51. You're not old. And here's why. Here's why. When you file bankruptcy, the control goes out of your hands. Yeah. Do you understand what it looks like? I don't think you do. Go ahead, Jade, paint the picture. No, not exactly. They're going to decide, they're going to make all the decisions. Depending on which chapter you file, they're going to make all decisions. They're either going to say, hey, we're going to put you on a payment plan, which is honestly something you can do yourself. They're going to look at your assets and they're going to say, we're going to sell off these assets and these assets, and we're going to put that towards the debt. That's something that you can decide to do for yourself. It's going to tank your credit. That's something that's already happened or going to happen anyway. Do you see what I'm saying? So why relinquish control when you have the opportunity here to go, okay, I can look at my assets. I can determine what I want to sell off, when I want to sell it off, how I want to sell it off. I can look and I can call the IRS and I can say, let's get on a payment plan. Here's how much I can put towards it. And that's what I want to retain for you is the dignity of being able to make your own choices and not have them come in and have your stuff sold out from under you and all the choices made for you. That's what I'm trying to save you from. I've never experienced bankruptcy. Dave Ramsey has, and he would sit here and tell you, you can work your way through this. And I'm telling you from my experience of paying off debt, the next four to five years, they're not going to be fun. I can tell you that right now. It's not going to be something that's enjoyable. There will be enjoyable parts of life, but working two to three jobs is not going to be the enjoyable part. But what is going to feel good is knowing that you made some mistakes, you made a bit of a mess, but you're also the same person that can turn back around and clean it up. There's dignity in that. And there is something, there's a confidence that's built in that. And I can tell you on this side of it, if you allow yourself to walk through that, you're going to come out of this a completely changed person and guaranteed better for it. Guaranteed, Ken. Oh, there's no question. I think, Joshua, what we're hearing is a guy who feels like he's ready to give up. You called us going, I think this is my last shot. This is the Hail Mary. The clock's ticking down and I only have a 55-yard pass and I hope someone catches it. And I think it's bankruptcy. And we're telling you that's not the case. You got to believe. I do tell you, you've got a marriage issue. You guys got to get on the same page. I get that you don't want to do it, but I think you guys are in the have to stage. You're past the want to. Create your free every dollar budget today. The simplest way to budget for your life.