📈 Are you on track with the Baby Steps? Get a Free Personalized Plan 📱 Watch the full episode for free in the Ramsey Network. app Dave Ramsey and Jade Warshaw answer your questions and discuss: "We lost our paid off home to a fire recently and it was severely under insured..." "I'm about to fall behind on my payments and I have no income. How do I get out of this situation?" "I have collection agencies coming after me. How do I negotiate with them?" "We were in Baby Step 7 but now find ourselves back in Baby Step 2. Where do we go from here?" "Should I cosign my daughter's student loan?" "Should we take a loan from our parents to buy a house instead of selling our bitcoin?" Next Steps: ✅ Help us make the show better by taking this short survey! 📞 Have a question for the show? Call 888-825-5225 weekdays from 2–5 p.m. ET or send us an email. 🏘️ Find a Ramsey Trusted Real Estate Agent 💵 Start your free budget today. Download the EveryDollar app! 🎟️ Dave Ramsey and John Delony are going on tour this month! Get tickets today Connect with our Sponsors: 🛒 Stop paying more and start shopping smarter at Aldi 🌱 Get 10% off your first month of BetterHelp 📱Go to Boost Mobile to switch today! 🏥 Learn more about Christian Healthcare Ministries 🏡 Get started today with Churchill Mortgage 🔒 Get 20% off when you join DeleteMe 🏦 Go to FAIRWINDS Credit Union for an exclusive account bundle! 🥗 Save 15% on your first Field of Greens order with code RAMSEY ⛨ Find top Health Insurance Plans at Health Trust Financial 💸 To find out more about student loan refinancing, check out Laurel Road 💻 Visit NetSuite today to learn more 🗂️ Use promo code RAMSEY for 18% off at The Nokbox 💵 Learn more about Timothy Plan 🏛 Get started with YRefy or call 844-2-RAMSEY 🔐 Visit Zander Insurance for your free instant quote today! Explore more from Ramsey Network: 💸 The Ramsey Show Highlights 🧠 The Dr. John Delony Show 🍸 Smart Money Happy Hour 💡 The Rachel Cruze Show 💰 George Kamel 🪑 Front Row Seat with Ken Coleman 📈 EntreLeadership Ramsey Solutions Privacy Policy Learn more about your ad choices. Visit megaphone.fm/adchoices
Chapter 1: How can I recover financially after losing a paid-off home to a fire?
Hi, Dave. Thank you for taking my call.
Sure.
What's up? I've been a big Ramsey fan since I was young. My dad taught me to be smart with my money and to listen to what you had to say. Well, thank you. My husband and I, our house burned in January, and it was a total loss, the structure and all the content. And it was paid for, but it was severely underinsured.
And so now we're in a situation where we haven't had a mortgage since 2019, but we only got $230,000 from the insurance, and it's going to cost us roughly $525,000 to build a similar house. And that's just kind of scary for me. We've never had a mortgage that large. I don't think... I mean, I know that we can afford it. We have a nice income.
We're currently debt free, but I'm just trying to make sure that I'm making the right decision.
And you don't have any money.
Well, we have the money from the insurance. Go ahead. We have about $5,000 in an emergency fund, but other than that, that's it.
So what's in your retirement accounts?
There is $47,000 in my retirement account.
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Chapter 2: What steps should I take if I have no income and am about to fall behind on payments?
Yeah, I know.
Yeah. And it would automatically, whatever the value of the house was, it did that. That's what it is, yeah. State Farm was the first one to do away with that because they were getting cleaned up. And State Farm's really interested in State Farm.
And so they were getting their clock cleaned with this stuff, and so they changed it, and they have a large enough footprint in the homeowner's insurance business that it started changing the whole business. And for a few years there, you could get some of the independence to write replacement costs, but hardly anybody will do it anymore.
It's pretty much stated value now, and you've got to go back and just revisit it every year and make sure you raise it. You'd think they'd come in and raise it once you raise it because it raises the premiums. That's true. But they don't follow up, whoever it is. None of the insurance companies do. So make sure you get a review with your insurance broker every year and raise them.
And that's what Jamie faced there. That's so sad, Jamie. I'm so sorry y'all are facing that. This is The Ramsey Show.
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Thanks for hanging out with us, America. We're glad you're here. Open phones at 888-825-5225. Well, guys, listen up. The new book, Build a Business You Love, is officially here. Launch week was awesome. We've been doing the rounds on all the podcasts and the shows. We've been getting the book in the hands of small business owners, tens of thousands of you.
And as a way to celebrate the launch of the book, our friends at Amazon Music have a Build the Business You Love featured billboard in Times Square in New York.
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Chapter 3: How do I negotiate with debt collection agencies effectively?
Okay. All right. So the first rule is you take care of your own household first. Now, what that means is the number one thing in your budget before you buy anything else is food at the grocery store. No food in restaurants when you're in collections. You're broke. You don't get to go to a restaurant. A restaurant is a luxury. Mama be at home. You're a sole income provider, so mama be cookin'.
Mama B, home economist, coupon clipping. She's going to be carrying all the economic weight she can carry while she's got those babies, okay?
Yes, sir.
All right. She going to sign up for that? You okay with that? She okay with that?
Yeah, I think we can come to an agreement. Yeah.
All right. No eating out, no vacations. You're broke people. Until you're not broke people, you don't do this anymore. Food is first. Before you buy anything else, you feed your little kids. Before we talk about any idiot at the repo company, he's way down on my list of things to worry about for you. Big deal that you get these priorities straight.
Second thing is you take care of water, lights, gas. You have the ability to operate your household with the utilities. Are you behind with any of them?
Just the electrical bill, but I have a plan to get that caught up.
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Chapter 4: What budgeting and financial priorities should I follow to regain control?
Chapter 5: Why is it important to maintain and update homeowner's insurance coverage regularly?
We've already decided that as well.
Mama needs help. You can't borrow to help her.
Correct.
No more. It's over. Because you got this start now, but you're starting in the hole again. And so we don't like to repeat this process. Okay. All right. That's a big deal.
I understand. Okay.
So, yeah, if you do that.
So I pretty much just start the debt snowball over.
No, there is no debt snowball. You're starting the baby steps over because there's not a debt snowball because there's no debt except the house. The house is baby step six.
Okay.
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Chapter 6: What are the emotional tactics used by debt collectors and how to handle them?
He's also threatening to sue me. Oh, just tell him to have at it.
Just get in line, buddy. Right now I'm getting my mortgage current where my babies live. You get to be at the back of that line. Bite me. No. You don't get any money until my babies are fed and they have a place to live and the lights are on. That's your first job, man. Yes, sir.
Because you're not going to make it emotionally if you keep putting these idiots at the front of the line because they threaten you. If he wants to sue you, tell him to have at it. We'll just file Chapter 7 bankruptcy. He'll get nothing. Bite me. I'm serious. Okay. All right. This is how you got to talk to him and you got to get it straight in your head. What's most important.
He makes his job is to make you angry or afraid. And that moves him to the front of the line. I want you angry and afraid of nothing because your kids are fed. Your house is current and your lights are on and mama's got food in the pantry. Then, then you live to be, you can throw back your shoulders and now we can fight like a man.
$231.
Okay.
Is it current?
Yes.
Really? I'm shocked. Good. One down, baby. All right. We keep it current then. Okay, so if you've got a car to drive and gas in your car, you're not going out to eat, you've got food and you've got a place to live, do you feel emotionally more stable?
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Chapter 7: What financial advice does Dave Ramsey have for handling credit card debt and collections?
These guys are specialists at emotional terrorism. It's what they do for a living. Okay. Because if he comes and sues you and takes your paycheck, you can file chapter seven bankruptcy. He'll get zero. I'm not recommending that because I think you can settle for this idiot to this idiot for probably four grand and he'll go away. You remember what the deficit was on the repo?
No, no.
The total, the total owed to them after the sale of the car is what?
Yes, sir. I can't remember.
Okay. But he wants $5,000 up front and then $800 a month, right? So it must have been $10,000 or $15,000.
Yes, sir.
Okay. So they'll settle for a quarter on the dollar. So he'll probably take about $4,000 for this whole thing and walk away once you get him back on his seat. But now he's standing over the top of you. Hey, listen up. Everyone is at risk of identity theft. I don't care if you're a hermit living off the grid listening to the show on a battery-powered radio.
All of your data, collected by every company you've ever done business with, lives online. Your bank, your doctor's office, retailers, the apps on your phone, the gas station where you have loyalty rewards. They all store your info online, making them ripe for a cyber attack or data breach.
That's why I've been telling people for almost 25 years, they need an ID theft protection plan, and the only one I've ever recommended is from Zander Insurance. They monitor your personal and financial info, even your home title, and take over the work if you become a victim. It's the most thorough and affordable plan out there. I even have it for my family and our entire team.
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