📈 Are you on track with the Baby Steps? Get a Free Personalized Plan 📱 Watch the full episode for free in the Ramsey Network app. George Kamel & Jade Warshaw answer your questions and discuss: "How do I get out of $520K in mortgages that my deceased father took out in my name?" "My wife told me she wants a divorce. Should we stop paying off debt?" "How specific should a budget be?" "Should I pay off my HELOC in Baby Step 1 or 6?" "I can't get life insurance due to a heart transplant so should I invest more instead?" "I've been stuck on Baby Step 1 for three years. How do I stabilize my finances?" "My husband and I disagree on how to pay for our beach house. What should we do?" 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. 🎟️ Dave Ramsey and John Delony are going on tour this month! Get tickets today 🏠 Get organized and prepared to buy or sell a home. 💰Hurry—Your chance to win $5k is almost over! Enter the Ramsey Cash Giveaway today! 💵 Start your free budget today. Download the EveryDollar app! 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 do I handle $520K in mortgages taken out fraudulently in my name?
Good. Yeah, I'm calling to see. My father passed away last July, and when I was backpacking about 15 years ago, we created a power of attorney to kind of protect me when I was traveling, as I had one experience where all my stuff got stolen. What I didn't know was that over the last 15 years, he had taken out about $520,000 worth of high-interest mortgages. In your name? In my name. Wow.
That feels like fraud to me.
Yeah. So, yeah, I'm just kind of at first it was one of those things where I just didn't know if I should go to to the courts for that because I was defensive and protecting my father. But since now it's been almost a year and it's not really been cleaned up at all. And I'm kind of not sure what to do financially.
Oh, gosh. So have you you have reported it or not yet? I haven't.
No.
I think that's the first step, right, is you can see this thing on your credit report. So kind of saying this, this wasn't me. This was my dad. And yeah, the fact he's he's no longer with us. What are those next steps?
Yeah.
Sorry.
When I did speak to one lawyer at the beginning and he said, because I had a power of attorney, that my dad was legally able to do this on my behalf. So that's kind of all the legal advice I've been given. Okay. Yeah. And I did sign it, but in 2011, I believe. So yeah, I'm kind of just not sure where to go now with that.
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Chapter 2: What should I do if my spouse wants a divorce but we have significant debt?
And you report. Have you reported this like done a police report? I haven't done a police report yet. No.
Well, there was the power of attorney and I'm not a lawyer here. So I'm just asking, was the power of attorney that was granted in case you were unable to make financial decisions, right? Not in every case.
My stuff got stolen while I was in New Zealand. Exactly. Kind of hard. Yeah, exactly. So I guess there was some clauses in there that maybe were put down that I didn't really fully understand. Like what? Yeah. Well, just making there was actually the loan clause and other things like that. So I kind of.
Here's the thing. And I hate this for you. And I don't know. I'm just going based off of what you're saying. Unfortunately, it does sound like there was language in this that puts you on the hook for it. And because of that, because it's a legal document, you might have trouble getting out of this. And I hate that for you.
Let's pretend for the sake of the last few minutes of this call, let's pretend you can't get out of it. Let's pretend lawfully you're on the hook for it. Tell us about your financial situation and let's see if we can walk you through a way out of this.
Yeah. Okay. So I actually just finished, I just went through flight school. So I actually personally in the last two years took out a $90,000 student loan, which I just finished my training all last week. That loan I took out just, I wasn't making, I make maybe 40K a year part-time because I was in school.
So yeah, I really... What will you make now that you've got your license? Yes. Okay.
Oh, I haven't.
I just graduated last week, so I haven't actually got a job yet. Okay. When do you see that happening? And when that does happen, what will you be earning?
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Chapter 3: How specific should my household budget categories be?
Absolutely. I mean, again, I'm not an attorney here, but just based off of what you're saying and what I hear, likely it's just probably going to get split down the middle in most ways. that you've been together a long time. It sounds like you were both working. You were both contributing to the income. You were both contributing to the debt.
So I would anticipate and I would fight for that sort of a split, unless you know of a reason for it to be skewed in one direction or the other.
Our biggest problem is, you know, just, She told me that about a week and a half ago. We're in our house right now that we have a mortgage on, but we want to keep the kids in the same school and rent, mortgages, any house at this point in this area. We're going to be paying almost twice the amount.
So you're saying for the person who moves out, that's going to be their burden?
Exactly.
I don't think either of you are going to be able to keep this house, though.
Yeah, that's George's right.
Because they're going to have to refinance, or one of you is going to have to buy each other out with a cash-out refi, unless you have the money, and it sounds like you guys don't have any money.
No. I mean, our account's pretty much more times than not withdrawn. I just did our monthly budget, and we're at $20,000 in, $20,000 out a month.
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Chapter 4: When should I pay off my HELOC in the Baby Steps?
There's definitely been some things happening, but it was never to the point where I thought that we would be going down this road.
I'm sorry this is happening. So on the income side of the 350, who makes what?
I make about $200. Okay. I'm a nurse. There's always a lot of overtime available. That's good. At this point in time, I'm making that amount because I'm working 60, 70 hours a week.
$18.
Okay. Okay. So let's just pretend for a moment that this does get split in half. And let's pretend for I mean, let's imagine worst case scenario, George. Let's pretend she gets the house and she's allotted a certain amount of time before she has to buy you out because a lot of times they'll do that. And let's pretend she's given several years before she has to buy you out. All right.
So that kind of means, hey, you're out here on the street, you're the one who's going to be renting, and you're also on the hook for half of this debt here. Let's talk about what that looks like for you. Is that fair?
Yeah, that's fine.
Okay, so you've got a great job. You've got overtime at your disposal. So if you're to move out, what we would tell you to do is try to find a place that's no more than 25% of your take home. That's thing number one, so that you've actually got your margin to work through whatever debt snowball you're going to have to work through.
Because chances are you're going to be on the hook for half of this, right?
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Chapter 5: What if I can't get life insurance due to a heart transplant?
And oh, specifically, I noticed when I look at the transactions, every Wednesday we stop because that's the day that the kids have Taekwondo, right? And then you start to see what your habits are. So not saying you have to do that forever, but it could be a way to identify where the trouble zones are.
Yeah, and every dollar does let you parse things out. So if you had a $100 grocery bill, but half of it was for household essentials, half was food, you can actually split that up in every dollar. And so if you guys want to learn more about that, we have free budgeting trainings ongoing this month that our team hosts. You'll learn step-by-step how to make and stick to a budget using every dollar.
Plus, you can get your biggest budgeting questions answered in a live Q&A. So spots are limited. Go sign up for free at everydollar.com slash webinar. Well done, George. Thank you. Thank you. Shannon is in Durham, North Carolina up next. How can we help, Shannon?
Hey, I hope you're both well. I'm calling because I want to know if we are the exception to the baby steps order. The reason I'm asking is because we do not have a mortgage. We were super blessed to be gifted a home when a grandmother passed away. Wow. So zero mortgage, zero car loans. We're driving beat up cars. We're living as college students. No lifestyle creep. But we have a $65,000 HELOC.
And I've always just kind of viewed that as... You know, $450, we're only paying interest now, but a $450 home payment, you know, instead of a mortgage. I'm kind of wondering if I can bump that more like step six because a $1,000 emergency fund for a very old special home is just killing us. You know, $3,000 well last year, water heater, braces, brakes.
I feel like all these things are things that we should be paying for, and it just, it was painful.
What's your household income? $90,000. Okay. Well, I'll give you this. You can put it in Baby Step 6, but not for the reason you're wanting to. Generally, what we would say is if the HELOC is over half your annual income, it can be tackled during Baby Step 6. If it's less than half your income, put it in Baby Step 2 where it fits in the debt snowball. So that's the simplest answer.
But what was the HELOC for?
When we first moved into the home, we were actually on a renovation show. Wow. Did they pay for the renovations? We had to match it. So we actually took out $50,000 to match. And then we were surprised by our taxes the next year because it was considered a gift. So then we had to... add on more to the HELOC to cover the taxes. So now the total is 65.
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Chapter 6: How do I stabilize my finances if I've been stuck on Baby Step 1 for years?
Chapter 7: What should couples do if they disagree about paying for a beach house?
And you report. Have you reported this like done a police report? I haven't done a police report yet. No.
Well, there was the power of attorney and I'm not a lawyer here. So I'm just asking, was the power of attorney that was granted in case you were unable to make financial decisions, right? Not in every case.
My stuff got stolen while I was in New Zealand. Exactly. Kind of hard. Yeah, exactly. So I guess there was some clauses in there that maybe were put down that I didn't really fully understand. Like what? Yeah. Well, just making there was actually the loan clause and other things like that. So I kind of.
Here's the thing. And I hate this for you. And I don't know. I'm just going based off of what you're saying. Unfortunately, it does sound like there was language in this that puts you on the hook for it. And because of that, because it's a legal document, you might have trouble getting out of this. And I hate that for you.
Let's pretend for the sake of the last few minutes of this call, let's pretend you can't get out of it. Let's pretend lawfully you're on the hook for it. Tell us about your financial situation and let's see if we can walk you through a way out of this.
Yeah. Okay. So I actually just finished, I just went through flight school. So I actually personally in the last two years took out a $90,000 student loan, which I just finished my training all last week. That loan I took out just, I wasn't making, I make maybe 40K a year part-time because I was in school.
So yeah, I really... What will you make now that you've got your license? Yes. Okay.
Oh, I haven't.
I just graduated last week, so I haven't actually got a job yet. Okay. When do you see that happening? And when that does happen, what will you be earning?
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Chapter 8: Why is borrowing money problematic even if you have good income?
There's definitely been some things happening, but it was never to the point where I thought that we would be going down this road.
I'm sorry this is happening. So on the income side of the 350, who makes what?
I make about $200. Okay. I'm a nurse. There's always a lot of overtime available. That's good. At this point in time, I'm making that amount because I'm working 60, 70 hours a week.
$18.
Okay. Okay. So let's just pretend for a moment that this does get split in half. And let's pretend for I mean, let's imagine worst case scenario, George. Let's pretend she gets the house and she's allotted a certain amount of time before she has to buy you out because a lot of times they'll do that. And let's pretend she's given several years before she has to buy you out. All right.
So that kind of means, hey, you're out here on the street, you're the one who's going to be renting, and you're also on the hook for half of this debt here. Let's talk about what that looks like for you. Is that fair?
Yeah, that's fine.
Okay, so you've got a great job. You've got overtime at your disposal. So if you're to move out, what we would tell you to do is try to find a place that's no more than 25% of your take home. That's thing number one, so that you've actually got your margin to work through whatever debt snowball you're going to have to work through.
Because chances are you're going to be on the hook for half of this, right?
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