North Carolina man owes almost $1M after his business failed, and Dave Ramsey’s no-nonsense advice shows him where his priorities really belong

Dave Ramsey’s advice? “Screw ’em.” (1)

"I don’t know if you’re going to make it or not, mathematically. And it’s a secondary concern; I’m concerned that you make it, and that your wife makes it, and your marriage makes it and your kids make it,” he added. “And the rest of these people can jump off a cliff."

Ramsey told John that his top priority should be taking care of his family — both emotionally and financially.

Holding your family together comes first

Ramsey asked for a breakdown of John’s debts: $250,000 in U.S. Small Business Administration (SBA) loans, $350,000 to the IRS, $100,000 in credit card debt, $250,000 on his mortgage, $8,000 on his car and about $23,000 in accountant and attorney fees.

Ramsey then asked John, 33, about his family: He’s been married for 8 years and has three kids.

“I remember being right where you are,” Ramsey said. “I was 28 with two [kids]. And I didn’t make it. I ended up bankrupt. But I can share with you a couple of things. One is: this stuff will destroy your marriage if you don’t fight for your marriage.”

For Ramsey, this was the more important message. He urged John to have an open and honest talk with his wife and keep their relationship strong through the difficult journey ahead. “You have to sit down together and say, ‘Regardless of what happens, we’re it, we’re doing it, we’re in it to win it,’” he said.

Ramsey also said covering the family’s basic needs should come before paying any creditors.

“Paying the first mortgage on the residence, so we have a place to eat, we have food and water and utilities, trumps anybody else’s request,” he said. “No one gets in line in front of your family, do you hear me, sir?”

Then Ramsey turned to the math.

“The SBA is gonna get what they deserve, probably, which is nothing, cause they’re bankruptable, the IRS is not bankruptable ... so that thing right there’s a real mess. You may end up selling the house to clear the stinkin’ IRS.”

The next step was to consult a bankruptcy attorney.

“I’m not telling you to file, but you need to learn what your options are because No. 1 is not credit cards — that can jump in a creek … They get nothing. And the SBA screw ’em, they get nothing right now,” Ramsey said. “And we’re gonna work on the IRS.”

Finally, he prioritized keeping the car, as John will need it for work. But he may have to sell his house to clear his debt with the IRS.

Most Americans carry debt

While John’s debt situation is extreme, he’s far from alone. Most Americans are in debt.

A 2024 analysis by Ramsey Solutions found the average U.S. adult owes $66,772. It also found that: (2)

• 77% of U.S. households are carrying some kind of debt.
• The average credit card debt for American households is $19,865.
• The average mortgage debt for American households is $230,905.
• The average auto loan debt for American households is $36,832.

Debt can feel inescapable, especially when high-interest credit cards are involved. But with the right financial planning, it’s possible to climb out.

Two of the most popular approaches are the debt snowball and the debt avalanche methods.

With the debt snowball method, you focus on paying off your smallest debt first while making minimum payments on the rest. Once it’s gone, move to the next-smallest. That builds momentum and motivation.

The downside? You’ll pay more in interest over time.

The debt avalanche method focuses on the debt with the highest interest rate first, which saves more money but can be harder to stick with since the biggest debt is often the toughest to tackle.