Скачать или смотреть Are you headed towards bankruptcy? This one number could predict it.

Jeff Kelly (00:00.0)
Hello, this is Jeff Kelly. Today I want to talk to you about high rent and mortgage costs and answer the question, can you predict whether or not somebody is going to end up in bankruptcy based on the percentage of how much they pay in rent or mortgage as compared to their net income? And I think the answer is yes. So what is considered a healthy number? Well, financial guru, Dave Ramsey says,

Jeff Kelly (00:30.478)
you should never go above 25%. So let me give you an example. If somebody's net income is their net take home is $10,000 a month. That means they wouldn't want rent or mortgage to exceed 2,500 per month. is solid as it gets. Now I personally, I think 30 % is okay. I see a lot of clients who, who are at that 30 % number and they succeed in making their chapter 13 work.

Jeff Kelly (00:59.822)
But what happens when it's more like 40 % or in some cases 50 %? Well, personally, I would not advise anybody to file a Chapter 13 if you are spending 40, 50 % of your net income for your rent or mortgage cost. And here's why. It's just not going to be possible after you account for food and clothing.

Jeff Kelly (01:30.094)
and maintenance, there's all sorts of things that are going to happen that you're going to need to have money to pay for. And it's just not going to be possible to do it when you are shelling out so much money just for the bare rent or the bare mortgage payment. Now, you can always file a chapter seven, wipe out your debts and get a fresh start as long as you don't have exposed equity in your house. Unfortunately,

Jeff Kelly (01:57.326)
I am seeing a lot of cases where people are paying 40, 50 % of their mortgage and they're, they're way behind on debts. And they also have like two, $300,000 worth of equity in their houses. That's never going to work in a chapter 13. There's, it's just not going to be possible. Now we're happy to sit down and look at every single case on a case by case basis to see, but

Jeff Kelly (02:26.03)
It's not wise to file a chapter 13 when you're shelling out so much money toward rent or mortgage and the budget is unrealistic because if you file chapter 13 and you get a case dismissed, you don't just automatically get to pop back in and refile the case. You have to file something called a motion to extend stay to get a second shot at it. And judges are very likely to approve it, but

Jeff Kelly (02:53.698)
That hearing must take place within 30 days of the filing. If you have two cases dismissed within a 12 month period and you file a third one, you have no protection, not a zip zero the day you file the case, nothing until there is something called a motion to impose the stay. Personally, we don't file, I don't file third cases because the success rate is so low. don't, you know, most of the time doesn't help people. There are other.

Jeff Kelly (03:21.304)
firms who do, but I don't have a lot of confidence. And you know, if you've had to chat, 13 is dismissed in the past year, pretty low odds, you're going to be able to make that third one work. And I don't think it's helpful. so what do you do when your rent is so high or your mortgage is so high and people do not like my answer. And my answer is move or sell the house because you've

Jeff Kelly (03:49.998)
got to make the math work. The math numbers have to work. I get it. A lot of people have a lot of emotional reasons why they cannot move. Some of them are emotional. A lot of times it revolves around the education of their children. I can't do it. This is not a possibility. Da da da da da. Kid has to stay in the same school. But here's the deal. You can't argue with math.

Jeff Kelly (04:17.858)
You just can't. mean, if there's not enough money to cover rent, there's not enough money to cover the mortgage. It doesn't matter what your reason is for staying. You're not going to be able to do it unless income is going to increase or expenses are going to decrease. And anytime you're filing a chapter 13, you got to budget a reasonable amount for food, clothing, car repairs. mean, all these things are necessities, electricity.
And, you know, I don't believe in filing a chapter 13 and somebody saying, I'm going to live on a hundred dollars a month and eat beans and rice for the next five years. That's just not, I don't, I don't think it's reasonable. I don't think it's doable, but, you know, I'm, we're more than happy to sit down with people and go through their income and budget. But the bottom line is yes, you can predict somebody's future financial situation based on how much money are they paying?

for rent and mortgage as compared to their net income. 25 % is ideal. I think 30 % is okay for every incremental point. You start pushing above 30, we start getting closer to that 40, 50%. It's just not sustainable. If you've got any questions at all, please don't hesitate to give me a call and you can check out my YouTube channel and my website is kellycanhelp.com.