[Music] brought to you by y refi refinance your defaulted private student loans today at y rei.com Ramsey so I am 23 years old um I roughly have about 90,000 in debt um 47 of that is uh a car loan my payment uh per month is $11,200 okay um when I bought the car I was making roughly 150 per year um lost both those jobs and now I make about 60 per year and um just wondering should I voluntarily surrender my car um I really can't afford it anymore with um between rent and cost of living
um I have 47 on the car about 37 in student loans and 6,000 on credit cards um I did uh complete baby step number one working on number two um my mom also mentioned that she thinks I should file for bankruptcy I'm not sure if that's the best solution but I just wanted to get your guys' thought on that no on the bankruptcy side I'll just I'll just say that yeah first and foremost we're not there we're not even close so there's some some good news for you I think Mom wants you to get a
clean slate and she's kind of wanting you to just shortcut this and and be free from the pain uh but there's better options here and so let's talk about the car instead of a voluntary you know repo could you sell it and come up with the amount you're underwater on uh the car is only worth about 25 so did you roll negative equity uh I might be able to but no did did you from a previous car how do you owe 50 Grand and the car is worth less than half of that uh the the
a the per um interest on it is 25% oh my goodness when I bought the car it was during Co um I needed a new car um didn't have much credit and uh they would only approve me for a brand new car I could not get approved for a used card and you said sure 25% sounds good that's reasonable let's go I need this $50,000 car oh and when you're making 150 this is the problem you feel like okay well I can afford payments and if I can afford the payment everything's fine and and that's
the backwards way of of going into when it comes to buying a car but that's what a lot of people do I can afford the payment so regardless of how much interest it is uh I can afford it and then life happens as you've experienced okay uh job-wise Alex what have you what were you doing before you said you had two jobs that you lost what were those uh I was a payroll manager for it company and then I was an assistant manager for a uh retail store okay and what happened to those jobs uh
the retail store ended up uh closing down um and um I wasn't able to get relocated and the it um firm also shut down oh okay so both companies closed what are you doing now uh I work in it still um on like the administrative side okay okay um single family kids single okay where are you living uh Cleveland okay are you living alone renting uh rent uh with a roommate um 1300 split between the two of us okay that's good um okay so yeah I mean the getting the car out do the 25,000 that
it's worth where did you pull that number from from a dealership or from like Kelly Blue Book uh Kelly Blue Book and a couple other like just look uh like browsing seeing like what similar um but it's not tradein value that's private party value yes private party oh man yeah cuz the problem is you need to come up with the difference even if you do a voluntary repossession they're going to sell it at auction for way less than it's even worth and you're still going to owe the difference yeah so it doesn't really it doesn't
solve all of your problems to even do the voluntary repo that's why we're trying to find another solution where you come up with the difference I'd rather you be 25 Grand in debt driving a beater than 47 grand in debt yeah and that's that's kind of my thought process too trust me I know this was probably the worst financial decision I've ever made uh but yeah I rather drive a hoopie at this point then you know D are you able to keep current with your other bills Alex right now making 60 yes this this credit
card debt is not ongoing to keep lights on and everything no I'm slowly paying that off thankfully I mean honestly Alex if I were in your shoes I mean I would figure out a way I mean it's about 18K for the difference of the car and you're probably not going to be able to get a loan for the difference well you said you you owe 47 on the car 43 oh 47 oh I wrote 43 47 okay so you're 22 22 under so that I mean ideally we'd say hey go to your local credit union
get a a loan for the difference maybe 25 Grand and three of that on a beater car but I don't know that they'd even grant you that loan at this point have you tried no I haven't tried um I kind of wanted to search all my options beforehand sure yeah that's the the least harmful of the options is to go to a credit union and see if you can get the difference in a loan and maybe a little bit more in order to get a beater car get rid of this payment and then you'll be
climbing your way out of this and then hopefully in the meantime we can get your income back up to six figures cuz clearly you're skilled enough and you're willing to do the work yeah for for sure yeah if you can get that 60 up for a full-time job and find something 75 or 80 right in like a perfect world and then the side hustle is what I mean that's what I would be doing Alex and I'm like if you can make God I mean you'd have to make 3,000 extra a month I me I'm trying
to do the math of how to do this within a year um to get to even save the amount for the difference right so Best Bets you can take a loan for the difference and like George said earlier a a local credit union is going to be your best bet versus a bank um they're the ones that are probably actually going to sit down with you and run more numbers and look um but so that would be my first option and then if not that's probably what I would do I would probably try to get
out of this car before anything else even before the solves half your problems y yeah if you can get out of that and then now the second half at least it's bearable and you can climb out of that pretty quickly even making what you make it's it's a solvable problem but I do think income is the biggest part and then your lifestyle is going to have get cut down to nothing for probably the next 18 months yeah and so this is no eating out this is hey the roommate wants sorry I can't hang out I'm
working three jobs it's it's not going to be a fun Journey but the good news is you're young enough that you have a lot of time to make up for this so all hope is not lost you don't need to go file for bankruptcy George would you if you were him would you save the 25,000 first get the car out and then do the dead snowball or would you start I just don't know how quickly he's going to save up 25 yes that is cuz I do Wonder Alex too if you got if you paid
off the six credit cards and did just the traditional debt snowball how much um payments monthly will be freed up because those are paid off so even just working down the debt snowball but knowing you have a freaking $1,200 car payment till you get to it to pay off is not fun um but in the meantime I almost would just work the Deb snowball till you get there but yeah uh thanks for the call Alex good luck to you we learn from our mistakes George we learn from our mistakes why refi refinances delinquent private student
loans for struggling borrowers learn more at yy.com Ramsey
