The Ramsey Show - App - A Car Accident Does NOT Give You Permission to Move Up in Car (Hour 1)

Episode Date: August 1, 2019

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Music Music Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's the Dave Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. Our phone numbers are 888-825-5225. That's 888-825-5225. Well, it has been a big week in the identity theft hacking world. At the first of the week, Capital One revealed that they are changing their slogan after 100 million files were hacked.

100 million people. That's bizarre, isn't it? Hacked by a Seattle hacker who is trying to be an anarchist and is instead a domestic cyber terrorist and needs to go to jail for decades. Hundreds of millions of dollars of cost that this one crazy chick has cost the public and this bank. I'm not a fan of Capital One. We did get some inside information that they are changing their slogan from What's in your wallet? to What's in your wallet?

Oh, wait, everyone already knows. Oh, and Equifax comes out. Equifax, our big friend at the credit bureau. Worst service of any company or organization ever on the planet. Unbelievable. With the possible exception of Capital One. As you know, they managed to lose 147 million consumers' files in a hack, in an identity theft process as well. And the thing about Equifax is this. Here's the deal.

If you do business with Capital One, that's your fault. You're dumb. You chose poorly. And then they get hacked. And they weren't doing anything wrong. They didn't deserve to be hacked. But, I mean, you do business with somebody like that, then you just deal with that.

The thing about Equifax is I don't do business with Equifax. You may not do business with Equifax, but they make money off of collecting your data without your permission. No other organization on the planet is allowed to do that other than the credit bureau reporting agencies. There's three of them, Equifax being the largest. you without your permission and sell the data on you and make money on it without you being compensated or without your permission there's a little something morally wrong about that in a world where everyone else is very restricted there's federal laws in place privacy act that says you can't share someone's payment information with someone else and yet

we're all supposed to share everything with equifax because some goob decided to so equifax gets hacked 147 million people they go through the whole process with the federal trade commission and finally get slapped on the wrist and they they have a whole $380 million set aside, which is supposed to give you $125 back if you spent $125 on credit repair, credit monitoring, or your time, and you can prove that. However, if you do a little quick math, $147 million times $125 comes out to be a whole lot more than $380 million. That's what, $3 a piece is what's allocated in the restitution fund. And so if everybody goes and tries to get their $125, because everybody can't go get it because everybody didn't spend it.

But if that, you know, mathematically, this is what's known as a joke. A joke. It's ridiculous. It's a scam. And the government's walking around strutting like they did something. You didn't do anything, you wusses. You completely let this bogus organization off the hook. $380 million on 147 million people losing their information?

That's $3 a piece, you goobs. It's a mathematical joke. I propose that Equifax sends me $1,000 a year for the rest of my life for using my information. There's your new joke. Ha ha. I don't think this is going to be happening anytime soon. 52% of the files at Equifax have errors. 37%, one in three, have errors so severe they will keep you from getting credit not as if i want you

to go get a bunch of credit so do you need to rush down and file for your 125 before everyone else does no because you're not going to get it they're not required to give more than 380 million so if it ends up that more people apply then then they can reduce the amount from $125 down to whatever it is, however many of you apply. It could be $10 apiece. It could be $80 apiece. Oh, and there's articles all over the place already that you may run into settlement website issues. When you go to their website, here's a shock of shocks. It's hard to use it's incomplete

it's inaccurate and it doesn't work kind of sounds like equifax hard to use incomplete and it's hard to work so your credit score that some of you are so freaking proud of is determined by an organization using your data without your permission and profiting from it. And 52% of the time there are errors on it. 37% of the time the errors are so egregious as to which to keep you from getting credit or damaging your precious credit score.

And that's for those of you that worship at the altar of the great FICO. So you can go try to get your $125 back. I wouldn't bother. You're going to run into more trouble. Here's what I would do. What I did years ago as soon as the law allowed, I froze my credit bureau report, and I froze my wife's, and I froze all of my kids. And they're still all frozen.

Why? We don't borrow money. So there's no need for you to check my credit. If you need to check my credit to do business with me, we're not going to be able to play together because I just is. I don't need Equifax to establish my identity, or for that matter, to get it stolen. So when your credit bureau report is frozen, that means they can no longer make money off of you without your permission. That part I really like, can you tell?

And in addition to that, once it's frozen, if someone did steal your identity and if they applied to a company to get a loan that did bother to check credit before making the loan which not all of them do it would prevent some identity theft not all so you should get out of the credit business get out of the debt business and get out of the equifax business wow this sounds simple, pure, like back in the day before people used our data without our permission to make a profit and then lost it 147 million times and then managed to settle with the government to pay everybody $3. Wow. Scam upon scam upon scam. It's a scam sandwich. There you go, folks.

Unbelievable. Wow. Freeze your credit bureau report. Call Zander. Get your Zander insurance identity theft immediately in place. Because between Capital One, what's in your wallet? Oh, everyone already knows. And Equifax, with their level of service, you're pretty much screwed out there, people.

This is the Dave Ramsey Show. This is big news, guys. You need to stop and listen. The Fed decided not to raise interest rates. That means you've got a small window of time before rates rise again. Here's the deal. Most people are paying too much interest on their largest expense, their home. So you're freaking crazy if you don't take 10 minutes to call Churchill Mortgage right

now and see if they can save you money before rates rise again. A mortgage through Churchill could save you thousands, or better yet, reduce the time until you're debt-free. Can you imagine how it would feel to no longer have that payment looming over your head every month? Just go to churchillmortgage.com or call 888-LOAN-200. Their team of experts will give you more clarity about your options and more peace knowing you're saving significant money in the long run. Call 888-LOAN-200. That's 888-562-6200 or churchillmortgage.com. Rebecca is with us in Wisconsin. Welcome to the Dave Ramsey Show, Rebecca.

Hi, Dave. I am so honored to speak with you today. You too. What's up? We are in Steps 4, 5, and 6, and we have three kids, a senior in high school, a sophomore in high school, and an eighth grader. In my budget, I have allocated

$1,000 per month for college. So, in about a year from now, I'll be writing a check for my daughter's first semester of school i'm estimating around seven thousand for that first semester should i open a 529 or an esa for her and put it or should i put it in a savings for the time being since i kind of feel like it's around the corner. Yeah, just savings is fine. The purpose of the 529 is the growth on the account is tax-free. In just a few months, you're not going to have any growth that's going to make screwing with this worth it.

Okay, okay, great. And then for my other two boys, the sophomore and the eighth grader, should I – Probably okay on the sophomore. I would on the eighth grader. Eighth grader. Because you've got five years or six years before you're going to be touching that money. That growth could happen.

I mean, if you made $10,000 in growth, you wouldn't pay any taxes on that $10,000 on that eighth grader, and you might have that much. Okay, great. And then 529 or ESA or it doesn't matter? It doesn't matter as long as you select a 529 that has, and this is the only kind of 529 we recommend for anyone, where you select the investments and they don't move unless you move them. Okay.

Some 529s automatically move them based on the age of the kid. Bad idea. Some 529s are fixed and you can't move them once you buy them the esa allows you to put them in whatever you want and move it whenever you want as far as the type of investment or the investment company or whatever else you can do all kinds of things with it so the esa has the kind of flexibility and i'm okay with the 529 as long as that's the type of 529 you get and just And just get with one of our SmartVestor pros if you haven't already, and they can help you do some calculation and get ready and, you know,

budget this $1,000 a month trying to get as far towards the goal of getting these kids through as you can. I'm not sure that's going to get you there at this late date for three kids, but it'll help a lot, and they can work, and they can choose affordable schools, and they can learn to take the ACT and get scholarships, and they can do some other stuff that's a good idea to help you get them through school. All right, up next is going to be Molly in Wisconsin. Hey, Molly, welcome to the Dave Ramsey Show. Hi, Dave. I'm so excited to talk to you.

You too. What's up? Well, long story short, I just totaled my car, and I'm looking at, I obviously have to get another one, and should I look at financing options, or should I take a pretty big hit to my savings account to pay with cash? Did you not have insurance? We did, but my car was rather old, so we're probably only going to get like four to six ish. Okay, so you were driving a $5,000 car before the wreck? Yeah. What's wrong with driving a $5,000 car after the wreck? Well, it would be okay. I'm looking, I want a car that's going to last me the next 10 years or so, just so that I can get the most out of it, and that's going to last me the next 10 years or so just so that i can get the most out of it and that's going to put me at about a ten thousand dollar car i doubt it you'll probably not keep that car

that long not on average but um so um i mean you weren't looking for a car before. I was not. You were driving a $5,000 car, happy. Yep. Okay, so I would start there. What kind of savings have you got? How much savings have you got? I have about $20,000 saved. Okay, and how much of that would you say is your emergency fund that's three to six months of expenses? Oh, I still rent an apartment for pretty cheap, so I'd say that that's probably $6,000.

What's your household income? $60,000. And you're single? Yes. Do you have any debt? Nope. Good for you. Well done.

Thank you. Thank you. Well, what I would do then is let's say this. Let's say I'm thinking it's probably's probably 10 000 at least is your emergency fund three to six months of expenses that would give you three thousand bucks a month for three months you now make more than that okay but you've been saving money so you know you're doing good and you've stayed out of debt so if we did that that means you've got another ten thousand dollars in a an account that you can buy things with if you wanted to.

And so if you chose to use some of that to move up in car, that would be okay. Okay. Because you have the money to pay cash for it above your emergency fund and you're debt-free and you want to use some of it to move up in car, that would be okay. Oh, by the way, if you had called me before you had the wreck and said, I'm driving a $5,000 car, I got a $10,000 emergency fund, I got $10,000 in another account, and I'm thinking about using some of that to move up in car, would that be okay? I make $60,000. I would have said, yeah, that all sounds wise. Oh, okay.

So this is the same answer irregardless of the wreck. Does that make sense? Sure. The wreck should not dictate this scenario and so let me tell you let me tell you why i'm deep was poking at this to make sure you're okay you could do that that's fine okay but the reason i was poking at it is sometimes people call me over the years and they say um you know i was driving a ten thousand dollar car i got my car total i got a ten thousand dollar check and i went and bought a twenty thousand dollar car now i'm in debt

and i'm going that was dumb well i had to'm in debt. And I'm going, that was dumb. Well, I had to go in debt. No, you didn't. You were already driving a $10,000 car. You didn't have to go into debt. You know, this is the conversation I usually have, right? Sure. And so that's not what you and I are doing because you were in a different financial position than that

because you've made other really good choices. So, yes, I would move to a $10,000 car, but I might have, I probably would have done that anyway if you just sold the $5,000 car instead of getting an insurance check for the $5,000 car. So, good question. Open phones at 888-825-5225. Gunner is

with us in New Hampshire. Hi, Gunner. How are you? Great. Yourself? Better than I deserve. What's up? I'm a 19-year-old and going to be a sophomore at community college this fall. I'm unable to make any more money through a job because I already reached my max limit to cover my bachelor's degree. And I have a scholarship that's going to cover that when I transfer. And I need to come up with $3,000.

Should I take out a student loan, or should I sell my gold assets that I do have? Okay, let's go back about three sentences ago. I don't understand why you're not allowed to make money. Why? Are you getting a Pell Grant? Yes. Okay. Because of that, I'm getting another scholarship that will give me a free ride for my bachelor's program. Yeah. And how much is that scholarship?

It's going to come out to be about $20,000 each year. It'll cover my full tuition. Okay. And what is the limitation on income to be able to do that? I did the math and it would be around $11,000, and I already reached that limit. For this calendar year? Yes. Okay. In the other calendar years, I want you to go ahead and make $11,000, okay? Yes, I'd plan on that.

Good. Okay. And, Gunnar, you must be a new listener, because I've never in 30 years recommended a student loan for anyone for any purpose. So how much gold have you got? I got it appraised, and I have about $3,000, which would be enough. And I could either take out an unsubsidized loan and pay it off probably next year as soon as possible, or should I sell the gold? That's where I'm at.

Yeah, I just told you I never recommend student loans. Okay. Okay, ever. So just sell the gold? Yeah, so gold sucks. In five years, gold has not gone up $20 an ounce. It's $1,428 an ounce today, and it was $1,425 years ago. Thank you.

Yes, my mom was telling me not to sell the gold but i was like it hasn't done anything i don't see it doing anything so just pull it up on the internet it's pretty easy look up gold prices in the last five years oh yeah okay it's a horrible rate of it's a horrible rate of return gold's always given a bad rate of return and so i don't recommend gold and i don't recommend student loans so this is easy don't do a student loan. Sell the gold. That makes it very easy for me. And you're a sharp young guy, man. Listen, you have a game plan.

You have a map to the party, and you're going to the party. You are a stud at 19 years old. Do not wander into student loans. $11,000 a year income? Boom. Pell Grants? Boom. Do what it takes to get through, man. Do what it takes to get through. No debt. No debt. And study something you can use. Don't get a degree in left-handed puppetry. You're a stud, man. Get after it. This is the Dave Ramsey Show. We'll be right back. Okay, here is something you do not hear a talk radio host say.

I screwed up. I was wrong. See that? You don't hear that. You do on this show. Because occasionally I just screw up so yesterday or day before i can't remember a lady called in and had a 529 and was wanting to transfer it to her child i said i don't think you can do that you need to double check with your financial advisor she said well the information i have says i can't i said okay double check it i may be wrong i was wrong the 529 laws used to be that only you could transfer from sibling to sibling. In other words, if you had a child, you know, three children, one of them didn't use all the college funds, you could transfer it to your other child.

Now the 529 law reads you can transfer it to any family member. Your brother-in-law is in your family. Not that I'm suggesting you do that. But you can transfer your 529, if you don't use it, if your child doesn't use it, you can transfer the beneficiary of the 529 to any family member. You can change the beneficiary at any time without any tax consequences. She was, the information she had was right. The information I had was old and wrong.

And I just looked it up because I was wondering about it. I suddenly thought about it. I wonder if I screwed that up. Because sometimes I do screw up. I mean, I don't know everything. And I know that's shocking to some of you. It's not shocking to my wife. But I don't know everything.

So, anyway, I screwed that's shocking to some of you. It's not shocking to my wife, but I don't know everything. So, anyway, I screwed that up. But the only part I didn't screw up was I did tell her three times to go double-check me because I might be wrong. I was wondering if I was wrong because she seemed so sure, you know, and that kind of thing. Here's one I'm not wrong about. Gold as an investment sucks. I told that last guy, that young man before the break, get rid of his gold, don't buy gold. Okay? The average annual rate of return on gold is about 1% over the last 70, 80 years.

Over the last five years, it has broke even. If you go back before that, it was the high when everybody was scared to death that the economy was going to crash. A bunch of people put gold. It was 2,200 an ounce. Now it's 1,400 an ounce. You would have lost 34% since then. So that's what gold's done for you. Oh, by the way, during the five years that gold broke even, the S&P's up 34%, 33%, meaning the stock market.

And so had you invested in good mutual funds instead of in gold, you would have actually made some money in the last five years. And so this is what you need to check on. This is what you need to understand. Do not put money in a commodity. Commodity is an item. We don't buy corn futures we don't buy gemstones we don't buy silver we don't buy gold these are commodities we don't buy any kind of agricultural futures. And the reason is that the item has a set amount of supply and demand, and the only thing that drives the price on it is one of two things, fear or greed. You cannot predict whether somebody is going to be scared enough to move all their money over into gold

and drive gold prices up, or greedy enough to move all their money over into gold and drive gold prices up, or greedy enough to move all their money out of gold and drive gold prices down. You can't predict human nature and what it's going to do. What you can do is do math on assets that make money. An asset that makes money is not a commodity. By making money, I mean it literally produces money. A company that a share of stock is sold in, you can actually look at the profits of the company.

You can actually look at things the company owns. You can look at growth trends in the profits and the balance sheets of the companies. Profit to earnings ratios, P.E. ratios. You can look and do a financial analysis on this stock and thereby place a value that has a mathematical reason for the value on that share of stock. On a group of stocks, it's called a mutual fund and though the values are derived as a mathematical process one plus one equals two not oh god i'm so scared i'm going to buy gold that's you know a guy with bad teeth that was on tv 25 years ago following the snuggie commercial

and the walk-in bathtub commercial on cable news is trying to sell you gold right beside a reverse mortgage. This is where you buy your investments? Right next to Snuggies and walk-in bathtubs? That's not a clue. That is a clue. Don't do it. Okay, so stay away from gold.

It has a horrible rate of return. Stay away from commodities of any kind. I buy things that have a mathematical, predictable, thereby, rate of return. I can actually forecast based on what it's done in the past. Past returns are not guarantees of future returns. Well, no, they're not guarantees, but they are indicative. It's the only forecasting method that there really is. And if it's zero past returns, you don't know what the flip you're buying into.

That's why a new company going on the stock market, initial public offering, an IPO for the first time is so difficult to value because you get information about what the company used to make when it was private, and it's supposed to be documented, but it's all about staging that stock price, and so IPOs are just dangerous. I like to buy things that are predictable. When I buy a piece of real estate, I don't buy the real estate based on anything

except the money that it makes. It makes this much rent, and that is an X return on the amount of investment I've made, and that's what you're looking for is a return on investment. So this is why you don't do that. Here's another announcement I bet you didn't know. August, this is going to change your life. You're going to be so excited.

You're not going to know what to do with this information. This is going to blow your mind. You ready to smile? Here, you ready august is national make a will month i told you this was exciting who comes up with this crap i can i mean it's also National Root Canal Month. You know what, though?

If your tooth is hurting, you may need a root canal, and everybody needs a will. So even though I'm making fun of National Mega Will Month, it is a good idea to remember you to get a will. You do need to get a will. Everyone needs a will if you're 18 years old or older. An easy way to start out is our will preparation checklist. This is free. After all, it's National Make a Will Month, so you need the checklist. Hey, honey, what are we going to do over dinner tonight?

Do our will checklist. Well, these are what adults do, okay? We actually prepare our estate plan. All kidding aside, even though it's just humorous to think of something that's morbid. Sick sense of humor. It's a free guide that helps you think through seven areas of consideration, like guardians, beneficiaries, what happens to the little things you haven't thought of, like your social media accounts. Woo-hoo, yeah.

I was worried about that this morning. I wonder what happens to Twitter when I die. No, that never came up. Well, you do need to have a plan. And this is a fun way to remind you you need to get a plan, and it's free. Get this free checklist, the seven areas of consideration. Once you've got your plan, you can drop it into an online will in about 10 or 15 minutes. Makes it a lot easier to get the will done, and does need a will so here's what you do download the free will preparation checklist text

the word will to 33 789 text the word will w-i-l-l to 33 789 easy way to tell your family that you love them is actually do the adult part of living, which is estate planning. You make sure you have your life insurance in place, your will in place, and everybody knows where the stuff is. Yeah, that's a proper way to live, even though we joke about it. You see somebody sitting around going, it's National Make-A-Will Month. Oh, brother.

Well, you do need a will. I've got a will. I spend a lot of money and time on it because it keeps the government from taking all the stuff I've worked my butt off to make. They've already paid taxes on it once. I'm trying to keep from paying taxes on it again when I die. Ah! Everybody needs a will. This is the Dave Ramsey Show. Paul is calling from Iowa.

Welcome to the Dave Ramsey Show, Paul. Thank you, Dave. Appreciate you taking my call. My pleasure. My wife and I are both retired teachers. I'm 70. She is 68. We have a $50,000 mortgage. My question is, do we sell stocks and pay off the mortgage, or do we continue to make the monthly payments plus an extra $1,000 a month and pay it off? What is the size of your nest egg? We have $450,000.

We also have an annuity, which we have annuitized. That's worth $300,000. We're already two years into it. We have six years left. That gives us an extra $2,000. We're already two years into it. We have six years left. That gives us an extra $2,000 a month. And either way, I mean, we're doing fine. Our annual income is $117,000. So we're just wondering which way to go.

And the $450,000 nest egg is what? Retirement savings or stock? is that what you're talking about the stock is stocks investment roth individual stocks too um yeah if i woke up if i woke up in your shoes i would uh cash enough of that in to pay off my house by the end of the day okay all right and then once i'm debt freefree, then I've got $117,000 income without any, you know, without any, you ought to be able to save money. You ought to be able to continue to invest. That's just what we're thinking is we'll take the money from that annuity and, you know,

obviously maybe take a trip or something, but we've got money to put back into investments. Yeah, and the $50,000 would be back in no time. Yes. Yeah, but I would love for you to be dead free, and you've done a wonderful job. What's your home worth? Well, the overall, we're over a million. Way to go. Yeah, we have another home that is paid off.

So, yeah, we were lucky. We had depression parents, so we learned about the Dave Ramsey kind of economics from them. It's paid off pretty well. Yeah, well, it wasn't luck. It was good raisin. Yeah, you are correct. We won the lottery in that regard.

So you did not inherit any money you became millionaires starting from nothing well we inherited a little bit from from my parents how much but you know 50 50 000 or so but you're not millionaires because you're not millionaires because you were at rich parents no no we we uh we had smart parents who taught us right. And you're two teachers. Correct. Yeah. Most we ever made combined in one year was $100,000. Wow.

Way to go. We did okay. Way to go. You did better than okay. You lived properly, and you've enjoyed your life. And, yes, you need to do some traveling with some of this money. You need to enjoy some of it as well. But I'd pay off my house by the end of the day or the end of the week or however you want to do it.

Thanks for the call. Well done. Classic case study of the everyday millionaire that Chris talks about. Chris Hogan talks about in his number one best-selling book, The Everyday Millionaires. I do not know where these political morons get their information. And it made a whole bunch of people believe that all the millionaires in the U.S., all the wealthy people in the U.S. inherited their money. Almost none of them did. Almost none of them.

It's well less than 10%. Nine out of ten are first-generation wealthy and by the way the third or fourth rather most often uh the number four career was teacher in the survey that we found accountants and. Teachers, that's my favorite one in the top five. Very cool. Well done. Heather is in Tennessee. Hi, Heather.

Welcome to the Dave Ramsey Show. Thank you very much. What's up? So about 10 years ago, I had a lot of accounts and collections, even a bankruptcy. Came into some money and paid them all off except for one credit card that was in transition and I couldn't find, so I never paid it. Flash forward 10 years. Someone called last month about that,

but I printed two credit reports this past year, and it doesn't show up on my credit report. So how do I know I'm not paying a scam artist? Okay, and the Federal Fair Debt Collection Practices Act requires them, if the consumer requests it, to provide you proof that they are the debt holder. Okay. So the next time they call, say, according to the Federal Fair Debt Collection Practices Act, Federal Fair Debt Collection Practices Act, and you can look it up online. It's pretty easy to find information on it.

You are required to show me proof that you're the proper owner of this debt. And you have to do that before we're going to have any more conversations. Now, that's, and then you need to do that to make sure you're not getting scammed. Now, once they do that, and I'm assuming they probably will send you something because you think this debt is real. I did have a credit card that I did not pay. And you think that that is this card? I do believe so.

Okay. So likely what has happened is it has been sold to a bad debt buyer. There are companies that buy old defaulted debt. They generally do it for two to seven cents on the dollar. So 50 bucks for a thousand dollar debt. Okay. And then they put it in a database and put people in a phone room and have them call and hassle you. And they have a very low collection ratio because it's old bad debt.

A lot of it's been bankrupted. A lot of the people are impossible to find. They had to track you down. And if they can't do it ever so often, they resell a batch of them after they've tried to find you or tried to collect. So it may resell then at three cents on the dollar, you know. So they've got almost nothing in this. Okay. Now, number one.

So number two, so if they do come back and you become convinced this is your old credit card and it has been sold to a debt buyer, it is a legal debt, it is a moral debt, and you want to clean it up, then you would start the process of negotiating to settle because they will have added 10x in ridiculous collection fees to the original balance. Okay. Because they hardly ever find one of the old bad credit borrowers and debtors, and when they do find one, they try to milk them. Okay?

So we're not going to allow that to happen on the other end. So do you have any recollection of what the balance might have actually been? It was around $3,000. Okay. They offered to settle for like $900. Currently they did? Yes, the last phone call. Yeah, I bet they did.

Yeah, you could probably settle this for about a quarter on the dollar. And so you can probably settle it for $500, $600. Okay. $900 was their first shot out of the bark. And go, okay, we can begin negotiations on this once you provide me proof that you're the actual holder of the debt okay and then wonderful and then we'll do 500 bucks now do not give them any money unless you have it in writing that they are accepting that amount as settlement in full remember that phrase okay so after they send me the proof ask for they send you the proof and then we come

up we come to an agreement 550 i'm going to do you send it to me that you're going to accept 550 for this debt as settlement in full you have to have that in writing an email is fine whatever but you need a written form not their verbal promise because you can tell they're lying if their mouth is moving okay now once you've got that in writing, then the second thing is do not allow them to have electronic access to your checking account. These are shadowy, scummy companies. I understand that, yes. You know, it's okay for the electric company to take your electric bill out of your checking account. That's okay.

You don't let these people have access to your checking account. You can send them a wire. You can send them a wire. You can send them a Western Union. You can get a prepaid debit card for $550, put that amount on it, then close that account as soon as they get it out, that kind of thing. You can do whatever you want to do that way, but don't allow them to have access to anything where there's more money in it or is ever going to be more money in it than you've settled with them.

So in writing, no electronic access to your checking account. Before we do any of that, we get proof of debt. This is like a ransom, proof of life, proof of debt, proof that they are the owner of the debt. That's federal law. They have to abide by that. So that's what I would do. Good question. Appreciate you joining us.

And it's a good idea to get this cleaned up from a moral, spiritual, financial, credit, everything perspective. It just makes your life better. It's worth the 500 bucks. This is The Dave Ramsey Show. Hey, it's Kelly, associate producer and phone screener for The Dave Ramsey Show. If you would like to do your debt-free scream live on the show, make sure you visit DaveRamsey.com slash show and register. We would love for you to come to Nashville and tell Dave your story.