$900,000 In Debt and Don't Know Where To Start

A couple is in significant financial distress, struggling to get on the same page. Their debt includes $52,000 in student loans, $12,000 in federal tax debt, a $175,000 mortgage, $331,652 in personal loans, $152,168 in credit card debt, $199,382 in business loans, and $65,156 in business credit cards. The wife's tax and accounting business, which grossed $325,000, has been operating at a loss and financed with debt, though she claims to have made a profit in the last two years before loan payments. The husband, who earns $120,000 annually from a W2 job, also contributed to the debt by investing in the stock market. He initially made a profit in 2020, paying a $25,000 tax bill, but subsequently lost all the money he had made by reinvesting it. This led to his personal loans and credit cards going unpaid, with one $40,000 personal loan now in collections. The wife recently lost a full-time job making $110,000 and is advised to find another to increase household income, which combined with her husband's salary and her business profit of $57,000, totals around $287,000. They both agree on the severity of their situation and the need to resolve it. Three principles are established: 1. No more day trading, as 97% of day traders lose money over three years. 2. Businesses that don't make a solid profit are bad hobbies; if the business cannot be profitable as a side hustle, it should be closed. 3. The couple must work together as a united front to tackle their shared debt. The immediate plan is to pay the $12,000 federal tax bill first, using the husband's $12,000 bonus. After that, all other debts, excluding the mortgage, should be listed from smallest to largest and paid off in that order. This process is estimated to take four to five years.