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Couple on the Brink of Declaring Bankruptcy For the Third Time

Maxed Out: Third Bankruptcy Is Not a Charm

This episode of Maxed Out is about Jessica and Greg, a couple who just can't grasp financial responsibility. They declared bankruptcy separately before they were married, and as parents of one-year old twins and a six-year old they are on the brink of declaring bankruptcy together. Their $55,000 of debt is overwhelming their relationship and dissolving their dreams of home ownership, and even though they earn a combined annual salary of $120,000, they are always one payment behind on all of their bills. Financial guru Allison Griffiths says the only way to avoid another bankruptcy is to overhaul their finances. To see what she found out when she took a deeper look into their spending habits,

.

It quickly becomes obvious that Jessica and Greg have an unhealthy reliance on debt. They spend $420 a month on bank fees alone and have a $594 shortfall every month, mostly from bouncing checks and paying interest to the payday loan service. They have $6,000 in collections, owe $33,000 on their cars, and are about $15,000 in debt to their parents. Because of their bad credit history, the loan on one of their cars is at 22 percent interest— when it's paid off in five years, they'll have paid for the car twice.

The couple spends $450 a month on coffee and cigarettes alone, and when Allison points out that in five years they would have $32,000 (the equivalent of their car loans) they realize that it's time to make big changes. By following Allison's instructions to get rid of Jessica's SUV, Greg's hot rod hobby, quitting smoking, and making coffee at home, they are on their way to financial stability.

They are still at least five years away from being able to buy a house, but Greg says he's learned it's necessary to pay attention to the little things in order to get the bigger things you really want. They're finally able to pay their bills on time, which is a big step from living on the edge of bankruptcy that got them on the show in the first place.

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CaterpillarGirl CaterpillarGirl 6 years
450.....on cigarettes and coffee....I cannot wrap my mind around it...abort...abort...system shutting down.....
niicoollaa niicoollaa 6 years
one word: budget. it's not that complicated. mint.comdebt is a scary, scary thing. i graduated from law school with 6 figures of debt due to my student loans. you just need a game plan. bankruptcy is never part of that plan (plus it won't do anything to those student loans). i hope these people do learn something so that they children have an understanding of money and budgeting when they grow up.
niicoollaa niicoollaa 6 years
one word: budget. it's not that complicated. mint.com debt is a scary, scary thing. i graduated from law school with 6 figures of debt due to my student loans. you just need a game plan. bankruptcy is never part of that plan (plus it won't do anything to those student loans). i hope these people do learn something so that they children have an understanding of money and budgeting when they grow up.
sorrowja sorrowja 6 years
WOW my hubby and I combine make less than these two we live in NYC and own a home. I don't smoke so I don't understand that part and the bank fees are crazy especial when there are so many FREE checking/saving accounts. Why write checks when there is online bill paid for everything w/no fees at that. With online bill pay you can track your spending better and you'll be able to schedule all your bills to get paid on time. This is just madness . . . I have to remind myself to watch this show.
shydcgirl28 shydcgirl28 6 years
Spectra - girl you know how I feel about people in debt honey, these people are a different degree of clueless though. Unbelievable. What/how are they going to teach their kids about finances? Someone commented about what happens when the cameras stop rolling...honestly, once, twice, 3 times?? I think they'll revert back to their old ways.
amybdk amybdk 6 years
And they make over 100k/year?! Absurd!
supercoolnat supercoolnat 6 years
That really is denial, to have previously gone through bankruptcy, not learned from your mistakes, and then have 2 kids and get a $33K car loan. No sense of responsibility.
emalove emalove 6 years
Wow...$55,000 worth of debt?! That is scary!
Spectra Spectra 6 years
I can't believe how incredibly stupid people can be with their money. Dude, if you are 55K in debt, SELL YOUR DAMN CARS and drive a frickin' beater. You'd think they would learn from declaring bankruptcy the first time, but apparently not. They make way too much money to be that far in debt, but I guess some people waste money on really stupid things instead of trying to save any money whatsoever.
Murmur314 Murmur314 6 years
"We can't just blame the banks for the state of our economy." You can blame them for not denying credits and mortgages to dipshits like these people. The article says that they "are still at least five years away from being able to buy a house". Okay, so maybe they have all debts paid off in five years. But then they have zero savings. And they're supposed to be able to buy a house then? Well, it's a recipe for disaster, and banks were too greedy to prevent this bubble from building up in the first place. Of course, the American "dream" of owning a house and having a car for each member of the family plays a role as well. Consumerism at its best...
Liss1 Liss1 6 years
I can't imagine making that much money and being that much in debt. If we made that much money a year we would have no debt at all, well except for the mortgage!
RunninginBoston RunninginBoston 6 years
Smoking is just stupid on any level, but when you have kids, that is horrible. Come on. And $33,000 in cars? I have a perfectly good car that I bought USED for $5,000. I haven't even had to spend anything in repairs yet. Why do people think they need new cars? And an SUV no less! I agree with Pegona above.
starangel82 starangel82 6 years
$420 in bank fees? $450 on coffee and cigarettes? Holy cow. I can't wrap my head around the amount of their debt with their income!
bellaressa bellaressa 6 years
I am just shocked at their debt and how much they make a month. When you have kids even without - you always need to pay attention for the little things. WTF, $450 a month on coffee and cigarettes alone.
Lady-HotPants Lady-HotPants 6 years
It'd be interesting to see a follow-up -- what happens 6 months from now? One year? Do the nice new habits stick, or not, once TV is not filming you anymore?
mlen mlen 6 years
it just seems so obvious that its crazy that some people just don't get it. of course if you are in debt you shouldn't be wasting money on cigs and fancy coffee- that is just like common sense!
Pegona Pegona 6 years
Imagine the tens of millions of households in the US who live in the same excessive, consumeristic, irresponsible lifestyle as this family. We can't just blame the banks for the state of our economy.
margokhal margokhal 6 years
They *married* while they were both in bankruptcy?? AND had kids?! What morons. Coffee, cigs, and the hot rod hobby are what really caught me. You OWE TONS OF MONEY, yet you still buy cars to fix up?! Beyond stupid. I hate coffee and I don't smoke, but eliminating those is a simple way to cut down on spending. Especially for the health and safety of your kids...why would you smoke around them? And you can AT LEAST buy a coffee maker instead of Starbucks...
TinaDenali TinaDenali 6 years
Oh my goodness.... are these people for real? That is just STUPID. How stupid are they? They have kids and they are wasting money on coffee and cigarettes? OMG. That's all I can say. OMG.
Smacks83 Smacks83 6 years
I'm with you Liz. I make waaaaay less than that and have no debt, but I guess when you make more it's just easier to spend the extra bucks (fancy coffees and cigs and such) because you tell yourself you are making great money. I think it's easy not to realize how much you spend on little things. I used to be a junk food addict and one day I sat down and wrote how much I use monthly on frozen tea drinks from Starbucks and candy bars and french fries and such. It was almost $200! I really was surprised. Needless to say then changed (and I dropped some pounds too,lol). I just think people need to be more aware.
lizrocks lizrocks 6 years
I can't imagine being in that much debt while earning that much a year. That's just sad!
aimeeb aimeeb 6 years
$450 on coffee and cigarettes, beyond stupid!
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