In an episode of The Suze Orman Show, a 52-year-old California teacher named Maureen, who had just received a pink slip, asked what to do about a house worth about $200,000 with about $400,000 owed on it. Orman's answer started with what Maureen said worried her most: her credit score.
“There comes a point […] where you have to not care about your FICO score,” Orman said. "Nobody is more FICO frenzy than Suze Orman. I was the very first person in the United States that started to get on television and go ‘FICO, FICO, FICO, FICO.’ However, we're talking about survival mode here. If you have no money, how are you going to buy your food?"
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Orman read the numbers back. "As I'm looking at your finances, you have about $21,000 of credit card debt, your house is worth about $200,000 now but you owe about $400,000 on it. You really have nothing in savings," she said. Maureen also paid roughly $1,000 a month toward student loans, most of it her daughter's, while her mother had recently given her $10,000 from an inheritance.
The episode is dated from its own references. In it, Orman describes the market as having "skyrocketed" from March 2009 into 2010, and a guest's 2007 Escalade is called three years old. Orman, a personal finance author and former CNBC host, built her television career on protecting the FICO score.
The plan was conditional, and the condition came first: "If in fact you really do lose your job and it's over." Then: "Because you don't have any money, you might as well stop paying the mortgage payment right now. This is not easy for Suze Orman to say to you, but if you don't have money — we have nothing in emergency, there is no money anywhere — then I don't want to see you take money that you could feed yourself [with] […] They will not foreclose on you for a long period of time." Orman told Maureen to call the lender and ask for a short sale, and to accept foreclosure if the lender refused.
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Then came the word most personal-finance hosts use as a threat. "My true recommendation to you would be, even though I know this is something you don't want to do, is truly I would claim bankruptcy," Orman said. "Legally, bankruptcy is an option, girlfriend. It would allow you to start your life all over again except for the student loan payment." That exception is federal law: Student loans backed by the government generally aren't discharged in bankruptcy unless a court finds that repaying them would cause undue hardship, so the roughly $1,000 a month would survive the filing.
The rest of the plan was about the $10,000. Orman told Maureen not to put it toward the credit cards until she knew whether she still had a job, then said, "I would keep the $10,000 from my mother safe and sound. I would then move out of the state of California. I would find a new job in teaching somewhere, special ed, whatever, and I would start my life all over again." California, she said, "has a very high state income tax, and it is a very expensive state to live in." Protecting one lump sum above everything else is an instinct Barchart has covered before: Michael Milken once did the arithmetic on stage on what a $10,800 deposit becomes over a working life if it is never touched.
This was advice for one caller in one year, and the year matters as much as the caller. In the second quarter of 2010, CoreLogic counted 11 million mortgaged homes, 23% of the total, with loans larger than the house was worth. The most recent comparable reading runs the other way: ATTOM's Q2 2026 report put 3.2% of mortgaged homes seriously underwater, defined as owing at least 25% more than the home's value. The two firms measure differently, but by either yardstick Maureen's house — carrying twice its value in debt — sat at the extreme end of the worst year the modern mortgage market has had. Nothing in the segment reads as an instruction for a homeowner with equity, income, and an emergency fund.
The score itself hasn't changed. FICO is still the number lenders ask for, and still contested. The federal housing regulator's move to end FICO's hold on mortgage scoring sent Fair Isaac and Company's (FICO) shares down 26% in a day this year. Orman's point in 2010 was narrower than either side of that fight: The score is a tool for people with income, and for a caller with none it had stopped being the relevant number.
Orman didn't call it walking away, and she didn't pretend it was painless. "This is not easy for Suze Orman to say to you," she told Maureen, before saying it anyway. The advice a personal-finance brand is built on has an edge case, and the person who built the brand knew where it was.
On the date of publication, Caleb Naysmith did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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