A Los Angeles single mother earning $142,000 called “The Ramsey Show” to discuss bankruptcy as a solution to her $250,000 debt, including $100,000 in credit card debt, a $4,800 mortgage, and a $125,000 home-equity line. She contemplates bankruptcy or grinding it out with her monthly $9,000 take-home pay.

Despite owing $650,000 on her property, valued at close to $1 million, the mother only put down 3% when purchasing. Co-hosts advised her to sell the property to pay off debts, including student loans, and become debt-free with significant cash on hand, rather than filing for bankruptcy.

The single mother, with an 11-year-old child, plans to rent out a guesthouse for additional income. Co-hosts questioned the feasibility of her plan due to long recovery time from construction costs. They recommended selling the property to eliminate debts and build a strong financial cushion for the future.

Co-hosts highlighted the burden of the mother’s mortgage, which consumes over 50% of her take-home pay. They warned against bankruptcy’s long-lasting credit damage and costs. They suggested renting an apartment while saving for a down payment, emphasizing the importance of financial stability and avoiding further debt.

Read more at Yahoo Finance: Single Mom Earning $142,000 Faces $100,000 In Credit Card Debt And A $4,800 Mortgage On A $1 Million California Home