# When Do You Know You're Doing Everything Wrong?

An episode of [Suze Orman's Women & Money (And Everyone Smart Enough To Listen)](https://invisiblenetwork.ai/podcast/1439621652), 26 Jul 2026, 30 min.

Audio: https://traffic.omny.fm/d/clips/2df1102a-5761-4c99-b489-aabd0161f8fe/44e0936e-923c-43c7-9e2a-aade00edf4d3/167c1958-14ea-4f31-8ffe-b49200f7b00e/audio.mp3?utm_source=Podcast&in_playlist=4e05fb00-5a5b-4ed9-b353-aade00edf4dd

On this brand new Ask KT & Suze Anything, Suze answers your questions about when you can contribute to your solo 401k, needing an executor, and caring for aging parents. Plus a "Can I Afford It?" question and more. Learn more about the Ultimate Scam Protection here: SuzeOrman.com Watch Suze’s YouTube Channel Jumpstart financial wellness for your employees: https://bit.ly/SecureSave Protect your financial future with the Must Have Docs: https://bit.ly/3Vq1V3G Help with the Must Have Docs: • Email:support@musthavedocuments.zendesk.com • Phone: 888-510-0510 Get your savings going with Alliant Credit Union: https://bit.ly/3rg0Yio Get Suze’s special offers for podcast listeners at suzeorman.com/offer Join Suze’s Women & Money Community for FREE and ASK SUZE your questions which may just end up on the podcast. Download the app by following one of these links: CLICK HERE FOR APPLE: https://apple.co/2KcAHbH CLICK HERE FOR GOOGLE PLAY: https://bit.ly/3curfMI See omnystudio.com/listener for privacy information.

## Transcript

[0:08] KT: Hi everybody. Good morning, Suze.
[0:10] Suze: It is always a good morning with you, Ms. Travis.
[0:13] KT: It's July 26, 2026.
[0:16] Suze: No it's not, no it's not!
[0:16] KT: Wait, wait, wait, wait, wait. OK, so we pre-recorded this
[0:20] KT: podcast before we left for our trip.
[0:23] KT: To Italy, Ciao Bella!
[0:25] Suze: For her birthday. This is another Ask KT and Anything
[0:30] Suze: combined with Suze School. Now why do I say that?
[0:35] Suze: Because some questions require more of a detailed explanation. It's
[0:39] Suze: more like a teaching part.
[0:42] Suze: And others are just kind of answers to people's questions.
[0:45] Suze: So therefore we're combining them kind of together. But are
[0:51] Suze: you ready, KT?
[0:52] KT: I'm ready. So that's how I'm opening today's podcast. On
[0:56] KT: the Women and Money app. I got another little series
[0:59] KT: of questions, but this one
[1:00] KT: in particular, I think is really important. It says, Suze,
[1:05] KT: when is the last calendar day I can contribute to
[1:10] KT: a solo 401k?
[1:12] Suze: Yeah, I'm kicking myself because KT, I should have had
[1:15] Suze: that in the master class two weeks ago. What was
[1:18] Suze: I thinking?
[1:20] Suze: But here's what you need to get, all right. You
[1:23] Suze: have to open, and by the way, if you don't
[1:25] Suze: know what I'm talking about with a solo 401k or
[1:28] Suze: a SEP IRA, go back two weeks from today and
[1:33] Suze: listen to the master class on solo 401ks versus SEP IRAs,
[1:39] Suze: and you'll find out that if you're self-employed, you are
[1:43] Suze: crazy in most cases not to have a solo 401k. However,
[1:48] Suze: the last day that you can open a solo 401k,
[1:53] Suze: is December 31st, let's say this year, if you are
[1:57] Suze: gonna open up one for 2026, you have to have
[2:02] Suze: opened it up by December 31st, 2026. However, that doesn't
[2:10] Suze: mean that you have to fund it by December 31st, 2026.
[2:16] Suze: But here's what you need to know if you are
[2:19] Suze: a sole proprietor.
[2:22] Suze: When you open it up, and it has to be
[2:25] Suze: opened by December 31st, 2026 if it's for this year,
[2:30] Suze: you have to elect how much of your own salary
[2:34] Suze: deferral you are going to put in it. You don't
[2:37] Suze: have to do it. You just have to make that election.
[2:42] Suze: And you have for the actual money you have till
[2:45] Suze: the day that you file your taxes. So KT for
[2:48] Suze: 2026 contributions that would be April 15th, 2027, or all
[2:56] Suze: the way, by the way, like we do till October 15th,
[3:01] Suze: 2027 if you file an extension. However, here's what everybody
[3:07] Suze: needs to know because remember when you're self-employed,
[3:11] Suze: you have two ways to go. You can be a
[3:13] Suze: sole proprietor, right, KT? Or you could form an S corporation. OK. Now,
[3:20] Suze: if you're an S corporation, and you pay yourself a paycheck,
[3:24] Suze: a W-2, which chances are you will,
[3:28] Suze: then your employee contribution, your employee has to come out
[3:33] Suze: of that paycheck through your payroll, and that has to
[3:37] Suze: be done by December 31st of this year. No extension, nothing.
[3:44] Suze: Your employer hat or your employer contribution
[3:48] Suze: can still wait until you file. Now how is that
[3:52] Suze: for complication, KT? That was a little mini Suze School.
[3:56] KT: Suze, tell everyone what is the difference between an S
[4:00] KT: corp and a sole proprietorship.
[4:03] Suze: All right, so before I go to an S corp, everybody,
[4:06] Suze: let's just start simple.
[4:08] Suze: A sole proprietorship. I always want you to think of
[4:13] Suze: the name of something. A sole proprietorship means it is
[4:18] Suze: just you. So maybe you're a freelance, you consult, you
[4:22] Suze: sell things, and you've never filed any other special paperwork,
[4:27] Suze: all right? It's just you and your business, same person.
[4:32] Suze: The business makes $1.
[4:34] Suze: And that $1 is yours and it goes right in
[4:38] Suze: your personal tax return. Now, you may think that's just great, everybody,
[4:43] Suze: but you probably didn't know that on that money, on
[4:46] Suze: the profit, you're paying self-employment tax.
[4:51] Suze: That's Social Security and Medicare, a little over 15% on
[4:57] Suze: every dollar that you make. That's essentially how it is. So,
[5:03] Suze: that's a sole proprietorship, very easy. You and your business
[5:08] Suze: are one. But when you form an S corp,
[5:12] Suze: you are not one with your business. The S Corp
[5:16] Suze: is a separate business. It's not just you anymore, and you, everybody,
[5:22] Suze: you become its employee. So therefore, you have to pay
[5:26] Suze: yourself a real salary, like a paycheck, a W-2, just
[5:31] Suze: like you work for anybody else. However, you only pay
[5:37] Suze: Social Security and Medicare tax on your salary.
[5:41] Suze: But the profit above your salary that comes to you
[5:45] Suze: as a distribution, so there is no self-employment tax on it, none.
[5:51] Suze: So bottom line, if your business is making serious money,
[5:56] Suze: an S corp saves you thousands in payroll taxes every
[6:01] Suze: single year.
[6:03] Suze: So KT, you tell everybody in your opinion, why doesn't
[6:07] Suze: everybody do that?
[6:08] KT: S corps aren't that easy. All right, there's benefits, but
[6:12] KT: it costs you money, everybody. You have to set up
[6:15] KT: payroll services. You need a separate tax return, and the
[6:20] KT: IRS really takes a look to make sure your salary
[6:24] KT: is reasonable, so you can't get away with anything.
[6:27] Suze: You can't pay yourself $10,000, everybody and then take
[6:31] Suze: $200,000 in distributions. They will come after you for that.
[6:37] Suze: So KT tell everybody who should do in your opinion,
[6:41] Suze: an S corp versus a sole proprietor.
[6:44] KT: If you're just starting out, let's say you're a hairdresser,
[6:46] KT: you're just starting out, you're making modest profits. A sole
[6:50] KT: proprietor is fine. It's simple. It's clean. It's actually a
[6:54] KT: whole lot easier.
[6:56] KT: And, and a little less work in terms of filing
[6:59] KT: and keeping track of everything.
[7:01] Suze: You're doing great so far. You're about to get a
[7:02] Suze: ding ding ding.
[7:04] KT: Wait a minute. But Suze, if you start out and
[7:06] KT: let's say you have a great idea for a business
[7:09] KT: and that business after your first, second year starts to skyrocket,
[7:14] KT: let's say it goes beyond your wildest dreams.
[7:18] Suze: Actually, KT, it's if, wait, if it goes beyond what
[7:21] Suze: a reasonable salary would be for you, that is the key.
[7:26] Suze: If a reasonable salary for you is X and all
[7:30] Suze: of a sudden you've made 2 or 3 x, that's
[7:33] Suze: when you consult a CPA and look into getting an
[7:38] Suze: S corp. Just that simple KT next question.
[7:42] KT: OK, Suze, this next question is from Teresa, and I
[7:45] KT: can tell you something. She watched the Suze Orman show
[7:50] KT: because after reading this question, it is.
[7:53] KT: Definitely a can I afford it question.
[7:56] Suze: Oh well, that's easy, denied.
[7:59] KT: She said, Suze, I would like to buy a quiet
[8:02] KT: luxury handbag in a basic color that is timeless, meaning
[8:08] KT: I will keep it until I die.
[8:11] KT: She said, I'm 67 years old. I am a teacher.
[8:14] KT: I plan on retiring next year. I live in California
[8:19] KT: and will retire with a decent educator's pension. So she said,
[8:23] KT: right now, I have about $600,000 in a 403B.
[8:29] KT: And a 457. I have $200,000 in a CD. I
[8:34] KT: have $30,000 in savings, and my husband and I have
[8:38] KT: a house fund for emergencies of about $16,000. The most
[8:44] KT: I have ever spent on a handbag was $259.
[8:51] KT: And that was for Dooney and Burke, which is a
[8:53] KT: nice looking bag.
[8:54] Suze: I personally wouldn't know.
[8:56] KT: OK, so she said, I would really like to own
[8:59] KT: a nice designer bag, The Row, a Bottega Venita, Chanel,
[9:06] KT: anything between $1,500 but no more than $3,000. What is
[9:12] KT: your advice?
[9:15] Suze: Really?
[9:17] KT: What's your advice?
[9:18] Suze: My advice is let's hear what KT has to say
[9:21] Suze: to you.
[9:22] KT: OK, so Suze's asking me to answer this because she
[9:25] KT: knows I worked in the luxury business for many years
[9:29] KT: with all of these designer brands, and I have to
[9:32] KT: tell you something. If I were you, Teresa, I would
[9:35] KT: go to a consignment store or some of these online secondhand.
[9:42] KT: You know, um, opportunities where you can get a beautiful
[9:46] KT: designer bag for pennies on the dollar, and then you
[9:50] KT: satisfy both needs. You keep saving and you have a
[9:55] KT: designer bag that you really wanted.
[9:57] Suze: See, I knew you would give her the best answer.
[10:00] KT: What do you think?
[10:00] Suze: Well, I think your answer is absolutely correct, but here's
[10:04] Suze: my concern. My concern is this, Teresa, you're 67 years
[10:10] Suze: of age. And you plan on retiring next year. That
[10:16] Suze: means your income, everything stops.
[10:21] Suze: And at the time of life when you're retiring, this
[10:24] Suze: is when you want a designer bag. Usually, especially women,
[10:31] Suze: when they approach retirement and they know income is going
[10:35] Suze: to stop, rather than spend, that's when they take their
[10:40] Suze: money and they wanna save, save, save.
[10:43] Suze: But not you. So it makes me wonder why, why
[10:49] Suze: at this point in your life, why is now the
[10:53] Suze: time that you want a designer bag? Hey, if you
[10:57] Suze: were 40, 50 right now, I'd say, yeah, go ahead.
[11:01] Suze: But at 67, I'm just wondering why.
[11:06] Suze: So I'd like you to answer that question for yourself,
[11:10] Suze: and if you come up with the reason that makes
[11:13] Suze: sense that you want to spend that kind of money
[11:17] Suze: one year before you retire, OK, if it were me,
[11:22] Suze: I would not be doing it, but more important than
[11:25] Suze: you buying the bag, I want you to understand why.
[11:30] Suze: Why at this point in your life do you want
[11:34] Suze: to do that? Next question, KT.
[11:36] KT: OK, from Stacy. Hi, Suze. I saw where you mentioned
[11:41] KT: that paying off your mortgage is the most important thing
[11:45] KT: for retirement. I agree.
[11:47] Suze: One of them, yes.
[11:48] KT: OK, so here is my dilemma. I am 63 years old.
[11:52] KT: I owe $130,000 on my condo.
[11:56] KT: I make $110,000 per year and I have $300,000 in
[12:03] KT: my 401k. I only have $15,000 in saving because I
[12:09] KT: just put a big down payment on a car. I
[12:12] KT: also have about $60,000 in gold and silver that I
[12:17] KT: can sell. I am still working and don't plan to
[12:20] KT: retire anytime soon.
[12:22] KT: Any advice as to how to pay off my mortgage?
[12:27] Suze: Yes, stop spending money you don't have simply to impress
[12:32] Suze: people you don't even know or like, because anybody who
[12:35] Suze: buys a big car and they have to put a
[12:37] Suze: down payment on it, that's exactly why they're doing it.
[12:40] Suze: But that's besides the point. Here's my concern for you.
[12:45] Suze: You say that you want to own your home outright,
[12:49] Suze: all right, by the time you retire, even though you
[12:51] Suze: don't plan to retire any time soon. Number one, you
[12:56] Suze: want to make God laugh. Have you ever heard this?
[12:58] Suze: Show her your plan. You don't know. Are you in
[13:01] Suze: a car accident? Are you sick? What happens? Does your
[13:04] Suze: company close? You don't know how long you have to work.
[13:11] Suze: You don't know that. That's an unknown.
[13:13] Suze: So I always tell you invest in the known versus
[13:16] Suze: the unknown. The known is most likely you're still going
[13:20] Suze: to need a home to live in, whether you are
[13:23] Suze: working or not. The known is your biggest monthly expense
[13:28] Suze: is your mortgage payment. Therefore, if you know that you
[13:34] Suze: want to stay in that house for the rest of
[13:35] Suze: your life, then that should have been a long time now.
[13:40] Suze: That should have been for a long time your number
[13:43] Suze: one priority to have it paid off by the time
[13:45] Suze: you retire. But no, you decided to take money even
[13:50] Suze: though all you have is $15,000 in an emergency fund. Really?
[13:55] Suze: All right. You decided to take emergency fund money from
[14:00] Suze: savings to put a large down payment on a car. Why?
[14:05] Suze: So your monthly payments could be smaller. Are you kidding me?
[14:10] Suze: And, you have $60,000 in gold and silver. Do what
[14:18] Suze: it already has gone up. Here's the bottom line. If
[14:22] Suze: it were me, this is what I would do. I
[14:25] Suze: would sell the gold and the silver, all of it.
[14:29] Suze: Maybe you have a capital gain. Maybe you don't. I
[14:31] Suze: don't know. You'll have to check that out before you
[14:34] Suze: sell it. If you could take that money and put
[14:37] Suze: it into your mortgage.
[14:40] Suze: That you currently have towards principal, make sure it goes
[14:44] Suze: towards principal. Now all you owe is $70,000 and if
[14:49] Suze: you continue to pay your monthly mortgage like you do
[14:53] Suze: right now or do it on a biweekly schedule where
[14:58] Suze: you actually do it every two weeks, which means you
[15:00] Suze: make one extra payment a year.
[15:03] Suze: You will have that mortgage paid off sooner than you
[15:07] Suze: have any idea. That is number one. Number two, you
[15:13] Suze: make $110,000 a year.
[15:16] Suze: And you're 63 years of age and you only have
[15:20] Suze: now $15,000 in savings. You need to take a hard
[15:26] Suze: look at yourself and what are you spending your money
[15:30] Suze: on because you don't say you're married, you don't say
[15:35] Suze: that you have kids, you use the word I throughout
[15:38] Suze: this entire thing.
[15:40] Suze: You know, and so therefore, you also have $300,000 in
[15:45] Suze: a 401k. It's not even a Roth 401k.
[15:50] Suze: So that means you don't have $300,000 in there because
[15:54] Suze: when you go to take it out you're going to
[15:56] Suze: owe ordinary income tax on it. So you have done
[16:01] Suze: everything wrong. You just have, and that is me standing
[16:05] Suze: in your truth for you because you wrote in and
[16:09] Suze: you didn't write in to get me to tell you
[16:11] Suze: what you could do. You already knew you need to
[16:15] Suze: stand in your truth.
[16:17] Suze: And you need to make you and your life and
[16:20] Suze: your money in savings and investment your number one priority
[16:26] Suze: over flashy things.
[16:28] Suze: Such as a car. All right, KT, next.
[16:33] KT: OK, this is from Maria, a simple one liner which
[16:38] KT: I love everybody. Maria asks Suze, does a living revocable
[16:43] KT: trust need to be registered at the county you live in?
[16:47] Suze: No, it does not, never has and never will. Now
[16:51] Suze: maybe there's some places that do, but not that I
[16:53] Suze: know of. All right, go on next.
[16:55] KT: So, from Diane. I don't have a trust because I
[16:59] KT: don't have any executor for my estate. I have no
[17:03] KT: family members, and most of my friends are older or gone.
[17:07] KT: I tried to hire an attorney, and she did not
[17:10] KT: want to be the executor. I'm leaving my entire estate
[17:15] KT: to charity, and I'm 76 years old. I don't know
[17:19] KT: what to do, and I'm very concerned. So, Suze, how
[17:23] KT: will the documents work if I don't have any one
[17:27] KT: to distribute my assets.
[17:30] KT: So I think, and she wrote, please enlighten me. So
[17:33] KT: can you please enlighten her?
[17:35] Suze: I can. And here's the first thing I'm gonna tell you.
[17:38] Suze: You don't have a will. You don't have a trust
[17:40] Suze: because of this excuse that you don't have an executor.
[17:43] Suze: Guess what? You have one. If you die, and this
[17:47] Suze: is true for everybody, if you die without a will,
[17:51] Suze: without a trust, the state that you live in deems
[17:55] Suze: that you have died intestate succession.
[18:00] Suze: And your assets will pass according to the succession rules
[18:05] Suze: of the state that you live in plus probate fees, OK?
[18:09] Suze: So let's just say your mother was still alive and
[18:12] Suze: you had kids, all right, maybe half would go to
[18:14] Suze: your mother or
[18:15] Suze: father, half would go to your kids. If you don't
[18:18] Suze: have any relatives or anybody, maybe they're going to look
[18:21] Suze: for cousins, uncles, aunts, but you already have one, whether
[18:26] Suze: you know it or not. You want to take power
[18:29] Suze: over your money. There's a few things you can do,
[18:32] Suze: depending on where your assets are. I'm assuming you have
[18:36] Suze: bank accounts, maybe you have a brokerage account, maybe you
[18:39] Suze: have a retirement account.
[18:41] Suze: You could designate right here and right now upon your
[18:46] Suze: death what's known as a pay on death account. You die,
[18:51] Suze: name the charities now that you want to get your money.
[18:56] Suze: You own a home. You could do a transfer on
[18:58] Suze: death account if you want. Who is to get your
[19:00] Suze: home if you have one? If that's to go to
[19:03] Suze: a charity, then do that. But you name it now
[19:08] Suze: while you still can, and that's the easiest way to
[19:12] Suze: take care of it. But I'm actually not that concerned
[19:16] Suze: about where your money goes when you have died.
[19:19] Suze: I'm concerned about what happens if something happens to you
[19:24] Suze: and how do we use your money to pay your bills,
[19:28] Suze: write your checks if you even write checks any more,
[19:30] Suze: to pay for a nursing home, to do all those things. Who,
[19:34] Suze: Diane is going to do that for you? All of
[19:37] Suze: a sudden you become incapacitated. You have a stroke. Anything
[19:41] Suze: can happen.
[19:43] Suze: So, you need to designate a durable power of attorney
[19:47] Suze: for health care, who can make health care decisions for you.
[19:51] Suze: So the must-have documents really can serve you well now.
[19:57] Suze: If you really don't have any friends, if you don't
[20:00] Suze: have anybody in your life, then you're in a situation
[20:04] Suze: where you need to hire a professional trustee, and there
[20:08] Suze: are firms that do that. Many banks will do that
[20:12] Suze: for you. Many brokerage firms may be will do that
[20:16] Suze: for you. You never know, but you will find somebody,
[20:20] Suze: but you need to get on it right now. But
[20:24] Suze: not taking action now.
[20:27] Suze: Just because you have an excuse of I don't have
[20:30] Suze: an executive for my estate just doesn't hold water with me.
[20:35] Suze: So tomorrow you are to make calls and you are
[20:39] Suze: to make pay on death accounts, find a trustee, and
[20:43] Suze: get yourself the must-have documents and do this now. Go
[20:47] Suze: to musthavedocs.com. Yes, KT.
[20:51] KT: OK, this next one and my final question.
[20:54] KT: It is fabulous, Suze. I love this. It's from Mary.
[20:59] KT: She said, KT KT, KT, please, please, please pick me.
[21:03] KT: And then she said, Help our beautiful 94 year old mom.
[21:08] KT: Love this question. My 94-year-old mom has about $10,000 in
[21:14] KT: credit card debt and has only been able to make
[21:18] KT: the minimum payments. Suze, the account is not delinquent, but
[21:22] KT: it's becoming a burden.
[21:24] KT: She has no other debt. She does have a reverse
[21:28] KT: mortgage and lives on Social Security and a teacher's pension.
[21:33] KT: She has early memory loss from multiple mini strokes, but
[21:38] KT: she's still remarkably independent. I moved in with her this
[21:42] KT: year to help care for her, though she's amazingly physically
[21:47] KT: capable for her age.
[21:49] KT: The five of us kids help with expenses when needed,
[21:54] KT: but we're at a point where we need to prioritize
[21:57] KT: our own financial future. If she doesn't have this credit
[22:02] KT: card debt, she could cover her monthly expenses. What do
[22:06] KT: you recommend?
[22:07] Suze: So you know, I'm a little confused here because $10,000
[22:10] Suze: of credit card debt is nothing.
[22:12] Suze: I have a feeling that Mary meant to say she
[22:15] Suze: has about $100,000 in credit card debt and, and yes,
[22:21] Suze: because $10,000 in credit card debt, KT, the minimum payment
[22:25] Suze: due would be like $200 a month, $300 a month.
[22:28] Suze: It's a burden when it's $2,000 or $3,000 a month.
[22:32] Suze: All right, so Mary, I'm just going to make the
[22:34] Suze: assumption that when you wrote this, you wanted to put
[22:38] Suze: down $100,000 and instead you put down $10,000.
[22:42] Suze: If you really did mean $10,000 then something is radically
[22:47] Suze: wrong and the five kids should each come up with
[22:50] Suze: $2,000 each and pay off that debt. But I just
[22:54] Suze: can't believe that $10,000 of credit card debt is that
[22:59] Suze: big of a burden. So I'm going to go with
[23:02] Suze: my feelings, KT, and say it's $100,000. So you need
[23:06] Suze: to listen to me here, which is this first of all.
[23:12] Suze: You know, mama has already a reverse mortgage. She's been
[23:17] Suze: living far beyond her means for a long, long time.
[23:23] Suze: You say she has no other debt. Well, that's great.
[23:26] Suze: $100,000 of credit card debt, a reverse mortgage, lives on
[23:30] Suze: Social Security and a teacher's pension, and blah, blah blah blah.
[23:34] Suze: My real concern is here.
[23:37] Suze: She has memory loss and it could get bad and
[23:41] Suze: even though you moved in with her, that doesn't mean
[23:46] Suze: necessarily that you're going to be able to take care
[23:48] Suze: of her really.
[23:50] Suze: It just does because sometimes they wander, they'll leave the
[23:54] Suze: house in the middle of the night, all kinds of things,
[23:58] Suze: and you'll find that even though you love her, you
[24:01] Suze: moved in with her, you might not be able to
[24:04] Suze: let her stay there, all right, so you should number one,
[24:09] Suze: be looking at a memory care facility just in case
[24:12] Suze: you have to move her into one, all right.
[24:17] Suze: That's number one. If you do have to move her
[24:20] Suze: into one now, you may need to sell the house,
[24:24] Suze: but because she has a reverse mortgage on the home,
[24:29] Suze: I don't know how long she has had this home
[24:32] Suze: for on a reverse mortgage. There may be equity in
[24:36] Suze: her home, and there may not be very much equity
[24:39] Suze: in her home.
[24:41] Suze: So it just depends how long she has had a
[24:44] Suze: reverse mortgage, and given that she is 94, why do
[24:48] Suze: I think she's had one for at least 15 or
[24:50] Suze: 20 years already.
[24:53] Suze: So we have a very, very serious situation here, Mary,
[24:58] Suze: and this is where the kids, all the kids, the
[25:02] Suze: five of you, need to get together and really look
[25:06] Suze: at what is the current equity in her home if
[25:10] Suze: the reverse mortgage was to be paid off. How much
[25:14] Suze: does a memory care facility really cost? And if, in fact,
[25:20] Suze: now listen to me closely.
[25:22] Suze: You've done that and they can't really attach a home
[25:25] Suze: or take anything away from her or whatever. You've sold
[25:28] Suze: the home. She has no assets. If she really has
[25:32] Suze: $100,000 of credit card debt after you have arranged everything
[25:40] Suze: for her and you know what's really going on.
[25:44] Suze: If that was my mother, I would consider claiming bankruptcy.
[25:49] Suze: Only if they can't take the house away from her,
[25:53] Suze: because the rules of bankruptcy is once you owe more
[25:58] Suze: than what you make, you are already technically bankrupt now.
[26:04] Suze: That debt is not going to pass down to the
[26:06] Suze: five kids. You could very easily, believe it or not,
[26:10] Suze: just stop paying it, and what are they going to do.
[26:14] Suze: Really it's unsecured debt. It's not secured by the house.
[26:19] Suze: Will it ruin her FICO score? Absolutely it will. But
[26:22] Suze: the truth of the matter is, who cares? Who cares
[26:27] Suze: about a FICO score when you are 94 years of age?
[26:31] Suze: So there are many things that you can do here.
[26:35] Suze: But if she really can't afford it.
[26:39] Suze: And she probably used that money to live on, so
[26:44] Suze: she didn't go on and buy all these fancy things
[26:46] Suze: and everything.
[26:48] Suze: Those are some ideas that you might want to think
[26:51] Suze: about again. Listen to my answer. Do you sell the home?
[26:57] Suze: Do you claim bankruptcy? Will they allow her to keep
[27:00] Suze: the home? Is there any equity in the home, or
[27:03] Suze: does it just make sense? And you should see a
[27:06] Suze: bankruptcy lawyer to claim bankruptcy or just stop paying the
[27:12] Suze: credit card and let it go into default ruins her
[27:16] Suze: FICO score.
[27:18] Suze: But there's nothing really much more they can do about
[27:20] Suze: that really because it's unsecured debt. Now maybe they could
[27:25] Suze: sue her, who knows, but they're not going to at
[27:27] Suze: this point in time. Those are some of your alternatives
[27:33] Suze: that you're going to have to decide what you should do.
[27:38] Suze: All right, KT, and that was kind of heavy, huh?
[27:41] Suze: It's been years since I suggested possible bankruptcy.
[27:45] KT: But I'm glad you did because I think that's probably
[27:49] KT: the best solution right now. But, she won't, the, the mother,
[27:54] KT: like she's 94 and she's racked up that much credit card debt?
[27:58] Suze: Maybe we don't know how she's lived for the past
[28:00] Suze: x amount of years, and this goes back to what
[28:03] Suze: I think I said in last Sunday's, right, podcast. Kids
[28:09] Suze: get involved with your parents' money sooner than later. Parents,
[28:15] Suze: let your kids get involved with your money, because this
[28:20] Suze: situation never should have happened ever. And again, Mary, if
[28:25] Suze: it is only $10,000 of credit card debt, great. Each
[28:29] Suze: of you can put in $2,000 each, get rid of
[28:32] Suze: the debt, and you're fine, but no way is $10,000
[28:36] Suze: doing this to your mother. No way.
[28:40] Suze: All right, KT.
[28:41] KT: That's a wrap, Suze.
[28:42] Suze: That's a wrap. And listen, next week, August 2nd, I'm
[28:47] Suze: gonna be doing a master class on required minimum distributions.
[28:52] Suze: You will love it, so make sure you tune in.
[28:57] Suze: We love you all, and there's only one thing we
[29:00] Suze: want you to remember when it comes to your money,
[29:03] Suze: and it is this:
[29:04] KT: People first, then money, then things.
[29:06] Suze: Now you stay safe. All right, bye bye.

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