Don't Be A Slave To The Lender

SPEAKER_1 (0:02)

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George Kamel (0:25)

Normal is broke and common sense is weird. So we're here to help you transform your life. From the Ramsey Network and the Fairwinds Credit Union Studio, this is The Ramsey Show. I'm George Kamel, joined by Dr. John Delony. We're taking your calls at 888-825-5225.

Patrick is in Detroit. What's going on, Patrick?

SPEAKER_3 (0:47)

Hey guys, thanks for taking my call.

George Kamel (0:49)

Sure.

SPEAKER_3 (0:50)

So, in 2012, I bought my family's home for $80,000 at about 3% interest. And worked on it, put in sweat equity. And about 10 years ago, I filed bankruptcy because I was buried in student loans. And I kind of got that in order. Of course, I couldn't get rid of the student loans, but got rid of other debt and structured things. Well, after COVID, I saw that I could sell the home I was living in, which I loved and I'm sick about right now, to pay off those loans. So I did. And I did pay off those loans and I was debt free.

And I subsequently rented for four years. Rentals are pretty high in my area. I rented for about $2,400 a month for three to four years and wanted to get back into owning a house.

So I bought a house last January for $230,000 with no money down, which I'm sick about that too. I'm raising my son alone. He's going into his senior year. And I have more debt now than I've had before. I have a car loan. I have $230,000 in mortgage. I'm paying $6.25 on that mortgage. I make $100,000 a year. I'm 59 years old. And I'm looking at retirement.

You know, I'm breathing down the barrel of retirement. And I have only about $150,000 and a 401k. And I'm, I'll tell you guys, I'm not, I'm not sleeping well. Yeah.

Dr. John Delony (2:47)

Thanks for calling, man. Thanks for calling.

SPEAKER_3 (2:51)

Thanks.

Dr. John Delony (2:52)

That was a hard call to make. And I'm proud of you for doing that, man.

Cool.

SPEAKER_3 (2:59)

Yeah.

Dr. John Delony (3:00)

And we'll give you a path.

SPEAKER_5 (3:01)

How do I get out of this mess?

Dr. John Delony (3:02)

We're going to give you a path here, but we're not going to beat you up. We're on the same team, okay?

George Kamel (3:07)

But if we're going to do it, we got to agree on one thing. We're not going to beat, pass Patrick up for his mistakes.

Dr. John Delony (3:12)

That's right.

George Kamel (3:14)

You've been, you got a crick in your neck from looking backwards. Of all the things you wish you could have done, things you should have done, regrets, shouldn't have sold that, shouldn't have taken on that debt. So can we agree that this is a new chapter for Patrick? 59 is going to look different.

SPEAKER_3 (3:29)

Yeah.

Dr. John Delony (3:30)

One of your homework assignments this weekend is going to be to write 2014 Patrick a letter and let that guy go.

Set him free. Okay?

SPEAKER_3 (3:42)

Yeah.

Dr. John Delony (3:42)

And then we're going to write 65-year-old Patrick a letter about who you decided to become at age 59 so that he could have a different life. Okay?

SPEAKER_1 (3:51)

Yeah. All right.

Dr. John Delony (3:52)

We'll get into the math here.

George Kamel (3:53)

So you're a 59-year-old making $100,000.

SPEAKER_3 (3:58)

Before we get into the math, I left something out. I do have $30,000 that is in my bank account right now. Great.

Dr. John Delony (4:06)

Great.

George Kamel (4:06)

You are doing better than most of America, if it gives you any consolation. It's a low bar, but you're doing better. So what is left on the car loan?

SPEAKER_3 (4:15)

26

George Kamel (4:17)

Man, sounds like you could be debt-free today.

Dr. John Delony (4:19)

Except for your mortgage.

SPEAKER_3 (4:21)

Well, and there's a $7,000 loan that I had to take out to get some repairs done on the house that had to be done. But that's all the debt.

George Kamel (4:32)

So you knock out the $7,000. Is that one loan, the $7,000 repairs?

Yeah. Okay. So if you knock that out, you're down to $23,000. You still owe the $26,000 on the car. You can knock most of the car out and keep that $1,000 starter emergency fund. What's the car payment and what's the payment on that other loan?