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When Elizabeth and her husband filed for Chapter 13 bankruptcy, they thought they were making a smart move to manage their growing debt. But fast-forward a few months and they're having serious second thoughts. Elizabeth explained during a call with Dave Ramsey, "We panicked and did some stupid things," and boy, has that panic come with a price –$91,000 in debt and two car payments they can barely handle.
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It all started when Elizabeth lost her job, leaving the couple to juggle everything on one income. Trying to stay afloat, they made what she describes as "some stupid decisions" to dig deeper into debt rather than step back and assess the situation. They filed for Chapter 13 bankruptcy, which, in their words, "seemed like the only way out" at the time. However, as Elizabeth shared, they quickly realized the payment plan tied to Chapter 13 was putting a strain on their monthly income, even after she landed a better job.
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They're working hard to turn things around – having yard sales and selling everything they can – but there's one big obstacle they can't shake: that Chapter 13 payment. It's become an unwanted guest at the table, eating up their income and standing in the way of their debt-free dreams.
"You've Got a Hornet's Nest in the Closet"
When Elizabeth called into the Ramsey Show for advice, Dave Ramsey painted quite the picture for her. "Pretend like you took a baseball bat and you hit a hornet's nest and you threw the hornet's nest in a closet and closed the door," he said. If they dismiss their bankruptcy, "you're getting ready to open the door" to all the creditors they owe money to – credit cards, personal loans and those pesky car payments.
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In other words, those creditors won't be pleased. They'll come after the couple "with everything they've got." And Elizabeth knew it: "Oh Lord," she responded, immediately grasping the gravity of what that meant. Filing for Chapter 13 might have put their creditors on pause, but dismissing the case would unleash the swarm and they'd need a solid plan to deal with the fallout.
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