Personal finance expert Dave Ramsey says the emotional aftermath of his bankruptcy still lingers nearly four decades later and that he “might still be recovering emotionally.”
Ramsey opened up about his experience while responding to a caller on his “EntreLeadership” podcast who asked why he didn't feel relief after resolving a long, painful financial crisis.
Paul, who runs a small audiovisual and rental company in Alberta, Canada, with his wife, said they were finally back on solid ground after years of financial chaos. At their peak, the business had five employees and was pushing close to 1 million Canadian dollars ($712,000) in revenue. But COVID changed everything.
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Bank Called With A 10-Day Ultimatum
“My bank called me up one day and said, ‘We are limiting our relationship,’ and gave me 10 days to pay our commercial mortgage,” Paul said. The building was sold in 2024 with a shortfall, followed by the sale of his personal home. Even then, the bank said he still owed CA$220,000.
He eventually negotiated a CA$90,000 loan to settle the debt. But after signing the final papers and escaping bankruptcy, something felt off. “I felt I was going to have a weight lifted off my shoulders and it didn’t happen,” Paul said. “Did you feel immediate release, or did it take time to recover emotionally?”
Ramsey answered with something Paul probably didn't expect.
“I was 28 years old, had a brand-new baby, and our marriage was hanging on by a thread. I had fought it for two and a half years,” Ramsey said. He recalled how the emotional weight didn't hit him until it was over. “When I filed, I was driving away from the lawyer’s office, and two stoplights later, I felt like I had sat down 500 pounds. It was like someone had been standing on my chest and they got off.”
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He told the caller that during his own ordeal, he had fought 40 creditors over the course of more than two years, while enduring foreclosures and lawsuits.
A Close Call That Still Haunts Him
Ramsey said what haunted him most was what could have happened. “They were coming the next morning to take the furniture out of our house, including the baby bed for the brand-new baby,” he said. “I did all I knew how to do.”
He told Paul that forgiving himself was the hardest part. “I lashed myself over and over again with the lash—metaphorically,” Ramsey said. It took him months to stop feeling like a failure.
Over time, he began to give himself grace. “You’re not as good as you used to think you were, but you’re not as bad as this part of the story says you are,” he said.
For Ramsey, the experience shaped his entire financial philosophy. “That started the whole thing of, I don’t borrow money. The next time a bank calls me, it’ll be to ask me to buy them.”
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A Business Still Worth Believing In
Paul's story resonated with Ramsey on multiple levels. He pointed out that Paul didn't make a business mistake but a debt mistake. “You didn’t fail at business. You failed at real estate,” Ramsey said. “The business that you’re running is still incredibly viable. Nothing you did was a business mistake.”
He also shared some frank perspective. “Part of this is your fault. Part of it is COVID’s fault. Part of it is the banker’s fault,” Ramsey said. “We could assign percentages of blame, but it doesn’t really matter. We’re still sitting where we’re sitting.”
Ramsey closed the conversation with words of encouragement. “You’re a good man,” he told Paul. “This is just something that happened to a good guy. Move on with that.”
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