You Can’t Hack Your Way Out of Debt

Dave Ramsey (0:06)

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Normal is broken, common sense is weird, so we're here to help you transform your life. From the Ramsey Network and the Fair Winds Credit Union Studio, this is The Ramsey Show. Rachel Cruze, Ramsey Personality, number one bestselling author, and my daughter is my co-host today. Open phones at 888-825-5225. Robert is in Philadelphia. Hey, Robert, how are you?

SPEAKER_2 (0:45)

Hey, good morning, Dave.

Dave Ramsey (0:46)

What's up?

SPEAKER_2 (0:48)

So, I'm calling to get a little advice and your opinion on a financial, I would categorize as a disaster that I'm going through currently.

Dave Ramsey (1:01)

Okay.

SPEAKER_2 (1:02)

So, I'm 34 years old and I am married to my wife. We got married back in 2018 And it kind of goes back to the relationship with her family. So, I met her, my in-laws, her parents back in 2010

They lived a very lavish lifestyle. And again, I never passed judgment, but, you know, I was like, wow, you know, my father-in-law does very well for himself. He was in the real estate business and had what I would say a large portfolio of commercial real estate.

Fast forward to two years ago, I discovered that my father-in-law, back in 2015 or 2016, basically got himself in a giant mess with the IRS. He owes currently several hundred thousand dollars in taxes. And what he did was he put my wife, his daughter and her two sisters, basically transferred all of the assets into their name. And my wife, you know, she did sign documents. It wasn't that her signature was forged or anything. But she kind of preemptively just said, hey, you know, it's my father, you know, he asked me to sign some documents.

Dave Ramsey (2:35)

So he was offloading assets into his kid's name to keep the IRS from taking the assets fraudulently.

SPEAKER_3 (2:41)

Yeah, correct.

Dave Ramsey (2:42)

This is fraud. Okay.

SPEAKER_2 (2:44)

So, so basically...

Dave Ramsey (2:47)

How old was your wife at the time?

SPEAKER_2 (2:50)

She was, so this was 2021, so she was probably...

Dave Ramsey (2:55)

No, no, no, no, you said 16 and 15 is when it happened.

SPEAKER_2 (3:01)

Okay, so that's when she...

Dave Ramsey (3:02)

She signed the documents after you were married?

SPEAKER_2 (3:06)

Yeah.

Dave Ramsey (3:08)

Oh.

SPEAKER_2 (3:10)

So, and, and, and I'll get to what I've discussed with attorneys, but fast forward, he had taken out a $10 million loan out under these girls' names, which they personally guaranteed.

And the buildings that were in the LLC that he started, they have been taken. They are up for sheriff sale. Now, I have talked to multiple attorneys. We filed taxes separate. Our house is in my name. I am financially, and I know we're married, but I am financially fine. I have a lot of investments. I have a lot of retirement savings. I do have another piece of real estate that is all in my name only, no mortgage, and multiple attorneys have told me, you have nothing to be worried about. I agree. We feel that your wife should just file Chapter 7

I guess this isn't more so a financial question, even though it is, but I just wanted your input. How do I navigate this? I mean, me and my wife, we're okay.

Dave Ramsey (4:36)

So here's the thing.

Rachel Cruze (4:37)

Because she felt deceived by her father, basically.

SPEAKER_3 (4:40)

Yeah, absolutely.

Rachel Cruze (4:42)

She went in naively and...

Dave Ramsey (4:44)

Just signed whatever he had to say to sign. Right, right. Yeah, and he is arrogant enough, he thought this was all going to work out. He probably did not set out to harm his children, but he's just an idiot. Yeah, okay. Correct. The...

All right, now...

SPEAKER_5 (5:03)

Gosh.

Dave Ramsey (5:04)

Okay, so the properties have all been foreclosed on. There's $10 million in loans. The properties have not yet sold after foreclosure, correct?

SPEAKER_5 (5:13)

Correct.

Dave Ramsey (5:14)

Okay.

All right. So the way the process will go down is the properties will be sold. Do you have any idea what this portfolio of properties might be worth?

SPEAKER_2 (5:25)

Approximately $7 million.

Dave Ramsey (5:28)

Okay. All right. So let's pretend that they brought that, and then that would leave $3 million unpaid. Correct. Okay. And I'm guessing that the other siblings don't have any money and are Chapter 7 bankruptcy as well.

That is correct. Okay. All right. And so let's just switch shoes a minute and put on the banker's shoes.

SPEAKER_5 (5:55)

Okay.

Dave Ramsey (5:55)

If I'm the banker sitting there, once I get into this, I can tell what happened.