The Ramsey Show - App - Even During a Pandemic, You Can Change Your Family Tree! (Hour 2)

Episode Date: November 2, 2020

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🎵 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. I'm Dave Ramsey, your host. Chris Hogan, Ramsey personality, two-times number one best-selling author, is my co-host today here on the air. Open phones at 888-825-5225. That's 888-825-5225.

Teresa is with us in Morgantown, West Virginia. Hi, Teresa, how are you? Hi, Dave, I'm wonderful. I have a question. Well, first, we owe like $33,000 approximately on our debt. We're in Baby Step 2. Of course, $36,000 on our mortgage with five years left. My husband's 49. I'm 45.

We did something dumb, and we'll never do it again, but my husband took out $70,000 from his retirement. $20,000 was for state and federal taxes. So we put the $50,000 on debt this year, so he didn't have the penalty thing. But still, that was stupid. We do have approximately a million in retirement right now. But he received a lot of overtime that we didn't expect. So he's already grossed over $130,000 so far this year. And my question is, do we cause our debt to snowball and save all of our extra in case we owe a lot of taxes because of that retirement?

I don't know if we took enough out, you know, being put up in the higher tax bracket, so to speak. You're guessing. Yes, I'm guessing. You're worrying. Why don't you just go to your tax person and run your taxes now? Run an estimate of what they're going to be for 2020. Okay. Well, we have, like, some farm things that we do and rentals and it's a lot of different so

okay so let your tax guy let your tax guy run you an estimate for 2020 they did it they did your taxes last year right they did yes okay that'll be able to run 2020 with these gyrations you've done and then you you can tell and look at that versus your withholding and see if you've underwithheld. Yep. Okay. And so then if we've underwithheld, would I stop? Now you have a new item at the top of your debt snowball. Okay.

Called the IRS. Called the IRS. And that's the same thing as putting the debt snowball on hold and putting them first, right? But you don't want to screw with the KGB. I mean the IRS. Called the IRS. And that's the same thing as putting the dead snowball on hold and putting them first, right? But you don't want to screw with the KGB. I mean the IRS. You want these people out of your life. Right, yeah. But here's the thing.

I'm not sure that this is more than a vague worry. Okay. You have a wet finger. You've got no math to back this up. No, not too much, I guess. I just don't want to be in debt anymore. I want to get out and stay out. Well, tell your husband to quit doing stupid butt stuff like cashing out retirement then.

Yes, he's already agreed not to do that again. That's what's created this. The thing is, if you'll sit down and do some detailed planning, then you can tell if your worry is a real problem or just a worry. Okay. Yeah, that's the sound of the CARES Act that the government did where they're allowing people to pull from their retirement without the 10% penalty. But guess what you do get to care about is the tax burden because you have to take care of it over the next two years. We're going to change the definition of the CARES Act.

We don't care about you, but you're going to care when you cash this crap out. That's exactly right. You get to care. There's the new CARES Act definition for you. But I like this. That's your Congress, and we're here to help. Yeah, they're not. But I like your suggestion of going to sit down.

Don't speculate. Let's know the villain, whoever you're dealing with, what it is, so you can start to game plan and go from there. Well, how many times have I sat, and I'm good at math, and had the monster from the swamp in my mind, and then I find out it's a mouse? You know? And I thought, dadgum, man, I just about burned the house down to kill a monster that wasn't even alive. A little bitty thing. A little bitty mouse. And so when you run the actual math, I thought it was $42 or something, and I thought it was $42,000.

See, and that's what fear does. It'll allow you to just isolate in your head and in your mind. Don't do that. Let's go with the facts. Sit down with a professional, talk about it, lay it out, and you know what you're dealing with. Stephanie is in St. Louis, Missouri. Hihanie welcome to dave ramsey show thank you how are you guys great how can we help um how long before we retire do we stop contributing to our rough iras or do we just keep doing it until we retire? Do you need money? No.

Okay. Why would you stop? I don't know. I just want to work. We're going to retire in about five years, but we only can put $14,000 in $7,000 each. So it's not really hurting you, and that money's going to grow tax-free as long as it grows right yeah i mean there's not like a rule that says you have to quit so most of our retirement is a traditional so should we in the next five years work at

rolling it over probably not you're probably just going to ride it out now now that you're this close um because you're going to pay the taxes as you pull it out and you're going to be required to begin minimum distributions uh required rmds required minimum distributions at 70 and a half on the traditional which means you're going to leave the roth alone and you'll you'll go through your traditional first because you have a required withdrawal on that. Well, I mean, let's see. We'll probably retire in five and a half years,

and my husband will be 58 and I'll be 57. Okay. So we have a wave before we hit 70. Okay. You won't be 59 before we hit 70. Okay. You won't be 59 and a half in either case? Nope. What are you going to eat on for those years until you're 59 and a half? We have some money saved up.

How much? We will have $150,000 when he's 58 and a half. And there's how many millions in the 401k? Um, there is in the, let's see, in his work one, there's 65 in our, uh, one with our financial advisor, it's 1.3 and we have like 40,000 in our Roth. Yeah. You had the aroma of a multimillionaire. I could smell it. And so, good job.

I'm proud of you. Chris, that's an everyday millionaire. No, you are without a shadow of a doubt an everyday millionaire, Stephanie. And you guys have done it the right way. You've diversified. You've spread it out. You guys have planned. You're intentional.

You're referring to what I've called a bridge account in my book, Everyday Millionaires, where you all had money set aside to be able to live on until you hit 59 and a half and you're able to access the 401k without penalty. So congratulations. You all are very intentional. As you sit down with your smart investor pro, begin to talk about what your budget's going to look like. You want to go ahead and build that now, your retirement budget, so you all are starting to adjust. And you get that muscle flexing. And the next thing you know, you're doing it out of habit, not out of response. Stephanie, I'm in the same situation.

I've got millions and millions in my retirement account. And I'm still fully funded every year because my goal is to send as little as possible to Washington, D.C. over the scope of my life. Because they piss it away up there. They will handle it, Dave. They handle my money? They will handle it. Yeah, they handle it a lot. This is the Dave Ramsey Show. You know what disappoints and angers me to no end?

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What a screwed up year. It's left people feeling off balance, stressed out, discouraged. You know, a bunch of times this year I've had to stop and kind of have a deep breath moment with myself. Just chill. Hit the reset button. You got to do that in the middle of all this crap as well as at the first of the year. We're definitely going to give old 2020 the boot and have a big New Year's Eve party, right? But, I mean, if there was ever a year you wanted in your rearview mirror, it would be this one.

But you can get back on track right now. You can take one of those deep breaths. We've got the opportunity to do that this Saturday, Chris, with our first ever Smart Conference, the whole day-long event where we talk about every area of your life, money, marriage, parenting, millionaires, stress, anxiety, every area of your life we're going to be getting into. It's all day long Saturday. We usually have 8,000 or 10,000 people in an arena for this. We've got 200 coming and tens of thousands of you watching it on live stream all day long and of course chris hogan is one of the featured speakers

i'll be speaking and closing the day dr les parrott dr john deloney ken coleman rachel cruz christy wright anthony o'neill the ramsey lineup plus and Meg, and it is a rock star day. It really is, Dave. It is so much fun, you all. A great opportunity to get rejuvenated, to get jump-started from moving forward in so many different areas. If I'm not speaking, I'm sitting listening, and it is a great opportunity. It's a family-friendly event.

If you've got teenagers, you can get this thing. Stay in the comfort of your own home and live stream it and sit and join us and have a day of growth. We're going to have positive, encouraging messages in the midst of this crazy year. I wonder how many hours of cable TV news would be offset by one day of watching the smart conference. So you kind of got it. If you don't want crap in your brain, you have to not put crap in your brain. Yes. You know, and you have to put other stuff in your brain to push it out.

We could have a media out on all that day Saturday. Get everybody to plug in. Let's not watch about the election. Well, it's over, hypothetically, by then. Quote, I don't know. Yeah, what do I know? I don't care. You know what? They're're gonna be up there counting

one for you one for you one for you they're gonna be doing that for a month so we'll find out in february 2021 listen doesn't matter we're not electing a savior it's just a figurehead position uh bottom line is we are in control of us yeah we're gonna help you control the only person that actually is gonna have an impact on your life, and that will be you. That's right. So Smart Conference coming up this Saturday. It's $29. If you are a Ramsey Plus member, it's free.

Well, that's a deal. That's a great deal. And reserve your spot for the Smart Conference live stream, DaveRamsey.com slash events. Yeah. I mean, where else can you watch an event in your footed pajamas? Right? Like, you can stay in your snuggie. What?

Footed pajamas. I know. They don't make them in my size. I was thinking. I was trying to visualize this. That looks like a bunny rabbit costume in my mind. That's what I'm seeing here. That's over the line, Ramsey.

Well, footed pajamas is over the line. Oh, my gosh. That's a visual I just didn't need. Okay, block. But listen, you get a chance to stay in your home, sip your coffee, and just have a day of learning with us. Seriously, this is one of my favorite events that we do every single year because I hear something, I learn something as a parent and for my own personal self and growth. I'm telling you, it is a day that's worthwhile. And it's family-friendly.

From 14, we've had young people come from 10 and 11 to be there, all the way up to 80. You can learn. And if you're not learning, you're going backwards. So intentionally push yourself forward. Join us for the Smart Conference. Those of you that have kids, if you've not heard Meg Meeker speak, and married and you haven't heard less parents speak i mean these these guys this stuff this is the best thought leaders in the world on these subjects well and don't don't don't don't shortchange yourself you're you're talking about goal setting this is the perfect time of year to hear this uh dave will i didn't think about that it

really is it's perfect you got this crap in your rearview mirror, and with all that manure, you've got to grow something. You've got to grow. And this is not a talk that Dave has done anywhere else. It's only at Smart Conference. So you've got a chance to tune in and learn something. I'm telling you, it'll be worthwhile. This is the time of year where I'm kind of scared. You know, the zombies are out, and the monsters are out.

But by tomorrow night, we're going to know which one wins. I'll be at home in my footer pajamas. Looking for them still. That's right. That with the skinny jeans. All right, Steve's with us in Houston. Hey, Steve, what's up? Good afternoon, gentlemen.

Thank you for taking my call. Sure. How can we help? Earlier this year, my mother was diagnosed with dementia, and because she was unable to care for herself, we had to move her from her home in Florida to where I live here in Texas, and she's now in an assisted living. We just sold her house for a December close, and I just found out that my brother, who's in the will, has requested his inheritance after the closing of the house. I was going to take the proceeds, as her power of attorney, take those proceeds and invest them so we can make sure that she has enough money for her care.

Because of the dementia, we feel she may be moved into a memory care facility, which the cost of those go up dramatically from what I understand. And I was just wondering, is it common to ask for your inheritance early? Is it even legal? Well, you can ask for it, but you're the power of attorney. Correct. If you choose to distribute some of your mother's wealth to her children, that would be in violation of your fiduciary responsibility, which is to take care of her with her money.

You can't do this legally. You would be subject to lawsuit. If she comes up short of money to take care of her and you gave your brother the money, the other siblings are coming after you, or they could. You see? I don't think I'd see it. Okay, well, you're the power of attorney.

Now, you'll have to ask an attorney, but this is correct. Okay, I'm not practicing law here. I'm the power of attorney on a bunch of crap. And so when you're the power of attorney, it means you are, you have what's called a fiduciary trust responsibility, which means you are to act in the best interest of the person whom you are a power for. In this case, your mom. I understand. Okay.

If you do not do that, you could be liable for suit by anyone that is harmed by you doing that. So an example would be you choose to give your brother his share of the inheritance out of this before she has passed, and then she comes up short on money, and the other siblings have to chip in to take care of mom. They have now been harmed by your inappropriate handling of this money because you didn't act in her best interest because you already told us what's in her best interest. She might need the money. That is correct. So you legally have to tell him no to protect yourself.

Wow. Excellent. Wow. Okay. Which is what you wanted to do anyway. Yeah. I mean, Steve, you're not going to allow your brother's wants to get in the way of what your mom needs. And that's just the bottom line.

So you would have him. How many siblings do you all have? Well, it's just my brother and the grandkids that are in the will. My sisters and I are not in the will. Because we have kids. Well, we have kids that are in the will oh your kids are in the will instead of you personally then the kids would be the one whoever stands to benefit from the money that is going to be uh messed up if she needs money and doesn't have any could come could come

after you so what you would do is check with the the way to handle this relationally is talk to the attorney that drew the will up and verify what I just told you to be true. And then you can go back and you don't have to say I talked to Dave Ramsey because Dave Ramsey don't know nothing. Right. So you just talk to say I talked to the attorney and the attorney says I would be liable if we come up short and I'm not willing to take that chance. So you'll just have to wait. By the way, an inheritance, technically speaking, is what happens when someone dies if there's any money left yeah and so yeah jeez so is people get a will draw up a will this is a prime example some people's children what can happen if you don't have it it's important go to DaveRamsey.com. I'm glad Mama had a will.

Glad she had power of attorney. She gave it to the right kid. She did it the right way. The right kid got it. He got sense. This is the Dave Ramsey Solutions on the debt-free stage, Aaron and Mia are with us, which can only mean one thing. They're debt-free. Congratulations, guys.

Thank you. How much have you paid off? $49,000. A little over $49,000. Very cool. And how long did this take? 26 months. 26 months.

And your range of income during that two years? About $65,000 to $75,000. Excellent. What do you guys do for a living? Aaron is a firefighter, and I'm a nurse, but I recently transitioned to stay-at-home mom. Well, when you're debt-free, you can do this. Very cool. Congratulations.

What kind of debt was the $49,000? Credit cards, a loan against our thrift savings plan, cars, student loans. You were normal. You had a little bit of everything. Right. How long have you guys been married? Ten years this year. It takes about ten years to get that far into stupid. Well done, guys.

You turned it around. What happened two years ago that lit you on fire like this? Well, actually, we took FPU six years ago, and stupid kept lurking in every corner. Yeah, I guess, yeah.

We didn't learn our lesson. It kicked you out of the university. And then in August of 2018, we just got tired of being sick and tired and said, this is ridiculous that we are worried about money each month and we make too much for this. Where is it all going? Did a certain thing happen, like a big budget fight, or you tried to buy something?

Or what happened that day that you said, okay. It was just being worried that we weren't going to have enough money like before payday. I don't remember like a specific fight. You had too much month left at the end of the money. It was just like, wait a minute. We may or may not have enough. We took the class. We know better. Exactly.

Why are we doing this? So what did you do? Did you go back and dig out the materials, go through them again? We sat back down. We wrote back out a debt snowball. So you knew what to do? Wrote it all down and said, all right, we're done. No more using the credit card in an emergency.

You raised your hand. Was that an admission? Oh, no more emergencies. Aaron, are you the spender, Aaron? Maybe. mission oh was it you no more emergencies okay are you the spender aaron maybe i think we have a both have a little problem with spending okay so but you kind of had an i've had it moment yeah i've had it i'm not doing this anymore yeah and both of you sat down and said okay game on we're not dragging the other one. We're going to do this together. And you wrote out the debt snowball and wrote out a budget and then started doing it.

Yep. So the first month was hard, I bet. Yeah. How long before you cut up your credit cards? We finally cut up the credit card once we paid it off, like, in the spring. Okay. So you held on to it for a while. Yeah. Okay.

Yeah. All right. Because you said it was a problem. It kept growing back. Okay. Yeah. All right. Because you said it was a problem. It kept growing back. Yeah. Okay. All right. But not during this journey.

Yeah. No. Okay. You were through using it for emergencies. Correct. Yeah. Okay. Good.

Very good. Did you guys have any cheerleaders through this process? I think our biggest cheerleaders were ourselves. Just listening to your show. Every day she had your guys' show on, so we'd whatever we were doing we were listening to you guys and you know man we got this debt free screams those are so motivating like that that has to be us we got to get there if those people are gonna do it i know i can do yeah once we realized that our snowball had picked up so much pace at the beginning of the month when we did this budget. We realized we were going to be debt-free at the end of the month.

Then it was like, oh, my gosh. I can't believe it. He said, what do you want to do? I said, I want to drive to Tennessee. I want to go to Dave Ramsey's studio. I need to be there for it to be real. That's cool. Where do you guys live?

We live in Indiana. Okay. So what, a five-hour drive? About five and a half yeah okay but not alone you got some kids oh yes how many we have three kids so a five hour drive with three kids yeah that's one of which does not like a car seat it's like a 24 hour drive that's what it is whatever it is you multiply it by the number of kids right it's a 15 hour drive yeah congratulations you guys seriously you guys. Way to go, heroes. Thank you. Seriously. You completely took control of your life. How does it feel now that you did it?

Ecstatic. Surreal. Yep. Relief. Yeah. Will you ever go back? No. No.

Never. So next time you get ready to buy a car, how are you going to do it? With cash. Cash. Cash. Save up and pay for it. Yep. The only way.

The only way. That's right. Don't even go look. Because I was so stupid. You know what happened to me? I went looking. Oh, no. Cash. Save up and pay for it. The only way. The only way. Don't even go look. Because I was so stupid. You know what happened to me? I went looking. Oh, no. Okay, y'all been there?

And I was just looking. And guess what I came home with? A car jumped into your driveway. I came with an SUV. I came home with an SUV and a payment from looking. So guess what? Now I don't even go look. That wasn't recently, was it?

No. It's PD, pre-Dave. Butave but you know it's crazy just that going to look and and five minutes of letting your guard down yeah seven minutes of letting it down or throwing a pity party for yourself right and so i'm proud of you guys way to go seriously way to go we got a copy of chris's book for you everyday millionaires you're on track to be that without a doubt that's the next chapter in your story keep playing through keep doing the stuff and keep the podcast on thank you guys so much thank you thank you we're very very proud of you how old are you two 30 29 and you brought the kiddos with you and we're gonna get them in the debt-free screen what is

the names and ages uh carson is seven grayson is five and madeline is just a little over one all right madeline let's get about to get loud madeline are you ready madeline love they all the little ones always love the microphone they want it all right aaron and mia carson graceland and madeline richmond indiana 49 000 paid off in 26 months, making 65 to 75. Count it down. Let's hear a debt-free scream. You ready? Three, two, one.

We're debt-free! That's so cool. Oh, I love it. Yes. That is how it's done. It really is. Aaron and Mia, those three kids will never know. You've ejected something out of your life that was going to hold you back, and you got yourself free.

And now you guys get a chance to move forward and build a legacy for them and their kids one day. So congratulations. You know, deciding to do something like that, one of the things that first happens is you start like they started because of just the moment of desperation. That month we're out of money. Yeah.

That credit card called me and yelled at me. That one thing, you start kind of on that small thinking, but a frustration gets in your face and makes you move. But as you progress through the process, what happened to them is true. You start to, actually, your thinking becomes more noble. You start thinking long-term, and you get a bigger and bigger. First, the why is just, I'm tired of this. Yeah, survival.

Yeah, and then the why becomes, I want to change my family tree. And it goes all, you know, legacy. I want this thing to be different. Never again. Never again. Never again. And moms and dads making those decisions do change family trees. And also events can change your family tree. The pandemic could be the year that your grandkids talk about.

Your great-grandkids talk about. That's back when, because of the the pandemic the old man changed his ways yeah yeah you know back in 2020 you know what would they say 20 ought no it's just 2020 it's just 2020 okay we have to we have an ought until we get to 2020 okay it was 20 ought 19 i like saying that too because i sound like an old person you do say 20 odd 19 but yeah but it was uh i mean you think about my grandpa was great depression they were married in the great depression and lost a business and started again and got jobs and raised a family you know mainly through the great depression and it changed

them obviously like a lot of grandparents right is he the one that saved the nails yeah you tell me about that yeah man and and but you know here I am, you know, a generation removed, but my parents would talk about how the Great Depression changed my grandparents. For the good. Yeah. And in some cases, maybe they didn't think it was for the good because they were pretty frugal. But we're Scotch-Irish to start with, which frugal kind of comes natural, but past that it was frugal anyway.

But the point being that the pandemic can be the time you say never again. The frustration for the monthly bills could be the time that you say never again, and your grandkids later hear from your kids. Those little kids right there could be telling their kids someday, we were on a debt-free stage. Mom and Daddy changed their lives. Yep. That was back when it happened in 2020.

See, that's what's changing a family tree. That's how the vernacular works. That's how the narrative works in your family script changes. This is the Dave Ramsey personalities my co-host today i'm dave ramsey this is common sense for your dollars and cents it's called the dave ramsey show al is with us in dallas texas hi al what's up hello thanks for taking my call sure what's up can we help? So I actually got a letter saying that we learned that the county clerk's office, office that this capital recovery company has filed a lawsuit against me for unpaid debt. And I do recall the debt.

And it's actually a debt when we used to be a single income family and getting my wife through college and all that, we did accumulate that debt and we didn't pay it. It was a credit card. And so now it's coming back to hunt us after six, seven years. And so there's, uh, several law firms have reached out to us and, you know, we can help you with this. Um, and I'm going to try to decide to see if we just go ahead and go directly with them and make an arrangement they tell me you know what you could pay this whole thing off it's going to cost you 4,500 or you could go ahead and just set a sum of

3,000 but then the lawyers then the lawyers are reaching out to us and you know what um you have nothing you know if you hire us we could go ahead and settle it for less sometimes we could be able to go ahead and eliminate it completely and it's going to cost you 1200 bucks yeah probably bankruptcy lawyers calling you the200 is probably for you to file bankruptcy. No, the actual, the $1,200, the $1,200 is for them to go ahead and take care of the case. And they're going to go ahead. Yeah, but you said they called you, right, Al?

Yeah. No, I'm so sorry. So they sent me a letter. Okay. Yeah, the attorneys did. Reached out, right. Okay, so what's the balance on the credit card? The credit card is $4,500.

Okay, and the company that is suing has already offered to settle that for $3,000. He says you could pay us $4 five hundred monthly payments no for the next 30 30 months not doing that or you could do it or we could settle it for about three three three thousand do you have any money what was that do you have any money have any money i could uh no where would you get any of this money we're talking about? Well, I was thinking more of the installment program to be part of the baby steps because we're on baby step two, paying things off. What's your household income? Well, I mean, take home like every month, it's like about six grand.

Okay. After taxes and all that, between me and my wife now. I would not hire an attorney to do a settlement of this type it's overkill and some of the attorneys that are sending you letters are not trying to work a settlement for you they're going to file bankruptcy for you and you got to be real careful there's a bunch of shysters in this space so um i don't think you need to. What I would do is call the company back and say, I can't do three, but I can do two, and I can do that 45 days from today. Because you can do that if you stop your debt snowballing and you scrape up two during that 45 days.

So I can do two by January the 1st. Okay. And if I let them know, then how would I, I would have to let them know, we'll come into that agreement as long as you send me a letter saying, you know, we're upon those two grand. Yep. And then you have to take the lawsuit against the county because that's what they did. But they mentioned to me that they're going to be serving me papers. That's fine. That's fine. That's fine. And so based on serving them in papers, I have to reply to the county,

and based on what I let them know. It's not a big deal. You can enter into an agreed order. They can do that themselves. If they agree to accept the $2,000, just tell them you need that to be an agreed order, and they'll do it. Agreed order. Here's the thing. Let me stop you a second, second okay the company that's doing this this lawsuit it feels to you like this is

some kind of drama lawsuit like you see on television or something or like a court case that involves criminal stuff this is not like a lawsuit at that level this is more like going to traffic court for a speeding ticket. In other words, these guys, when they filed this, they didn't file a single lawsuit against you that day. They took boxes of lawsuits down there and did them at one time because they are a widget factory, and you are one widget out of thousands of widgets that they're going after. So this is much more, it's very transactional for them.

It's much more like traffic court than it is Perry Mason or Matlock or whoever, right? CSI or anything else, right. So, you know, it feels, you've never been sued and it feels very scary and the unknown of it feels very dramatic and very legal, and I need a lawyer and all of that. If somebody was suing you for $500,000 because of a car wreck and an injury, yeah, get a lawyer. Okay? And there's times you need legal representation.

I would not spend it on this if I were you. I would call them and see if you can settle it for $2,000 payment by the end of the year, and they need to enter an agreed order with the county. Can you remember that phrase, agreed order? Agreed order. I'm writing it down. Agreed order with the county. Yeah, and then they need to send that to you in writing and know they cannot have electronic access to your checking account

and know you are not going to disclose a bunch of financial information to them, including where you work or anything else. Yep. And, Al, you're going to need to take a deep breath because you're going to need to be on the ball with this, meaning writing it down. I love that you're taking notes, but you're going to write down who you spoke with, the date, the time, the gist of the conversation. Like you want to keep a full conversation log on this.

If you cannot get it to come to an agreement, then you may want to spend $1,200 and hire an attorney to get them to come to agreement for you but make very very sure this is not filing um a bankruptcy the reason this comes up al is i was in texas the other day and i'm driving down the road and there's this big old yellow billboard with these two guys in suits on it and it says the billboard is be debt free and i thought oh that's some local guys doing a doing a talk radio show teaching people how to get out of debt like inspired by us or something i thought that's pretty cool and then i get to look at the billboard as we're driving and it's bankruptcy attorneys but the ad doesn't say bankruptcy it's a little bit at the bottom bankruptcy attorneys but the big thing is just two guys in a suit saying, be debt-free.

And I thought, man, somebody else has joined the crusade. That's awesome. But no, they didn't. No. They were just lawyers. Yeah, those money grabs. And so. That's exactly what that is.

I forget about the people doing this stuff. So, yeah, Al, just be very careful if you do retain an attorney. The fact that they are soliciting you and they're going through the entire box of lawsuits and sending them all letters and you're just one of them. Right. And our fear is that you end up with a $10,000 legal bill over a $3,000 credit card. Yeah, exactly. So just be aware, Al.

Thank you for reaching out, buddy. It took courage because you could hear the fear in your voice, but you've got steps now to be able to take to be able to protect yourself. So three things you're going to do. Get on the phone with them. Come to an amount around $2,000, whatever you can come up with by the end of the year. $2,000 by year end, by 1231. Okay?

Then second thing is get that in writing. And when you do that agreement, tell them that that needs to be an agreed order so they stop the lawsuit until 1231 after 1231 they can come after you if you don't pay it but then um because you didn't follow through on the agreed order then the second step is it has all this has to be in writing to you and you keep that piece of paper the rest of your life and then the third thing is they do not have electronic access to your checking account and you do not give them any financial information. When you pay them, it'll be with cashier's check or prepaid debit card.

But no access to any of your other accounts. We don't want them to know where they are or that they exist. So you're putting up the shields. You really are because they're good. They will ask you questions in a way that you don't feel interrogated. You really are, because they're good. They will ask you questions in a way that you don't feel interrogated. Now, where is it you work? You feel like you're having a conversation. That's not germane to this conversation.

This conversation is about $2,000. Yes. Makes us go away. I like that. All other questions that don't have to do with that are not going to be answered. Not dealing with it. This is $2,000, and I am out of your life, and you're out of my life. And it's in writing, and no electronic access to my checking account.

It'll be debit card or cashier's check. Those are the three steps. Greed order, we're doing this. Boom. And I've done tens of thousands of those and I am not a lawyer. Okay? And I wasn't practicing law when I did it. I just simply negotiated on behalf of a client of ours a settlement.

And you're allowed to do that for yourself or literally for someone else so um get her done dude i i wouldn't pay the money unless you get yourself painted into a corner and then get a lawyer that's a real lawyer not a bankruptcy attorney protect yourself this is the dave ramsey show show. This is James Childs, producer of The Dave Ramsey Show. On your smart speaker, you can add our skill by saying, Alexa, open the Ramsey Network skill. From there, you can listen to all our shows, ask Dave money questions like, how do I invest my money? Or what is the debt snowball? by saying, Alexa, open the Ramsey Network skill. From there, you can listen to all our shows. Ask Dave money questions like, how do I invest my money? Or what is the debt snowball? Find out more at DaveRamsey.com slash smart speaker.