The Ramsey Show - App - Whole Life Insurance Is Just a Trick Bag Sold by Crooks (Hour 1)

Episode Date: November 27, 2018

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Live from the headquarters of Ramsey Solutions, 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. Thanks for joining us, America. It's a free call at 888-825-5225. That's 888-825-5225. That's 888-825-5225. We're starting off this hour with Dothan, Alabama. Shelly is calling. Hey, Shelly, welcome to the Dave Ramsey Show. Hey, Dave. Hey, what's up? Well, first of all, I'm super excited to talk to you. I've been trying to get through. And my question is just about our house and kind of the situation that we're in with our mortgage and where we are with the baby steps. We've been trying to pay off debt and we've

made some good headway in that, but we're still in baby step two. We have a house, but, um, the mortgage is actually on a mobile home and we don't own the land that it's owned. And so we've kind of talked through three scenarios because we want to buy a house or build a house in the very near future. And so we were wondering if we should finish with Baby Step to get our emergency fund and then sell the mobile home and use that as a down payment. But we don't have very much equity in it. It's probably worth about what we still owe on it or if we should try to pay that off kind of as part of our baby step two and then keep it maybe rent it out or should we sell it during the process of trying to sell off debt like look at it as property instead of a mortgage yeah i'd sell it now.

You would? Yeah. The reason is simple. The longer you hold it, the more it's going to go down in value. Uh-huh. Even though we just put a brand new roof and a new air conditioner and everything in it because it got damaged in the hurricane. So we put a new roof and we just put a brand new air conditioning system and all. I mean, if you want to live there a while, it's up to you.

The longer you own it, the more it's going to go down in value. It's worth the most right now than it's ever going to be worth in the future. Right. Does that make sense? So what would you do in the meantime? Would you rent or would you go ahead and buy a house? Not rent. You don't have any money. Rent.

Right. We have about $11,000 left to pay off on our rent. You don't have any money. Rent. Right. We have about $11,000 left to pay off on our debt. We've paid off $26,000 so far. You've done great. You're making good progress, and you're making clear decisions, and you're thinking through things. You're doing a good job. But, I mean, you go rent, and you finish your Baby Step 2 and 3,

which is your emergency fund, and you're debt-free. And then you go to Baby Step 3B, which is where emergency fund and you're debt free and then you go to baby step 3b which is where you save up for a down payment to purchase a home in some people's case it's the first time they're purchasing a home in your case it's the next time you're purchasing a home only this time you're going to buy a traditional home which goes up in value not down in value or what about building Would you buy land and build? Because we live in a really rural community. There's a lot of land around us right now.

We're kind of in the country, and we like being out in the country. The only downside of that is if you don't have a little bit of experience around you, you can really get yourself into a mess. But if you've got a really good plan and you know a little bit about building, there's nothing wrong with building. You know, you could save up and buy the land and um that would be the equivalent of your down payment then when you get ready to break ground on the house you'd get a construction loan uh followed by what they call the permanent financing that would take out the construction loan uh when

you're you know when the house is completed and that's the normal process but when you have to have a really detailed you have to have a really detailed, you have to have a contractor to get a construction loan. You can't just decide you're going to go out there and build it yourself. You'll have to go through a whole process there, but there's nothing wrong with that. It's just a lot more complicated. Right, right.

Because that was kind of the dream that got us even into the paying off debt was we knew we wanted to get there. We didn't have any money. Like you said, we realized we worked too hard to be so broke, and that kind of got us going full-fledged with the idea that one day we'll be able to build, you know, a dream house. Yeah, now you've got a goal. Now you've got a plan instead of just being a rat in a wheel. But nowhere in this plan do you end up owning this mobile home 10 years from now

because it's going down in value, right? Right. I mean, you would say that, but just emotionally. I mean, we've got the two kids in it and all. It was just hard to wrap our head around getting rid of a stable house and then just renting something. I mean, you can stay there for two years while you do this. How much is your payment on the mobile home?

It's a little less than $400 a month, and so to rent would be almost double. Okay. Well, you're probably losing more than $400 a month, and so to rent would be almost double. Okay. Well, you're probably losing more than $400 a month, so it's about the same as renting then. So if you want to stay there and say, you know, we're losing $6,000 a year, what's the thing worth today? Probably about $45. Yeah. You're easily losing. And we owe $38 on it.

You're easily losing $6,000 a year, I mean, easily on that, probably more. But, you know, if you stayed there for a year or two and, you know, you got your debt paid off, you build up your emergency fund, and then you, you know, save up and buy some land, that's probably a two-year plan, right? Right. And then you sell it. We'll take you out of debt by March, April of this coming year. Then you've got to build your emergency fund.

Then you've got to build up the money to buy the land, which is the equivalent of your down payment on your house. So you've got a little while to go. But, I mean, if you want to stay there for a couple years, it's fine. It's just, you know, the calculation comes down to how much you're losing in value versus what you'd be losing when you're renting. And it sounds like it's pretty similar in your case so maybe you do stay there that's okay but let's not hold on to this thing a mobile home emotionally long term those that's not that's not something you want in a sentence together i'm holding on to my mobile home emotionally that's not a good sentence there's a lot of stuff you can hold on to emotionally mobile home emotionally. That's not a good sentence.

There's a lot of stuff you can hold on to emotionally. That would not be on the list. Michael's in Reno, Nevada. Hey, Michael, how are you? I'm doing pretty good, Dave. Thanks for calling. Sure. What's up?

I was wondering about using my savings account to save for retirement. No. It's a health savings account. save for retirement? No. It's a health savings account. It's not a retirement account. You need to use your retirement account to save for retirement. And that would be your Roth IRAs and 401Ks with a match, 403Bs with a match, that kind of a thing. Do those things first and foremost.

And we'll let the health savings account simply be there for if you've maxed out everything else and you're debt-free and you want to keep loading the health savings account that's fine that's what i have ended up doing but i'm doing it just because everything else is used up and i'm obviously debt-free and so it's another way to hot it's another way to shelter money so i don't have to pay taxes on it. It's not a lot of money, but it's turned into, gosh, I think I've got $150,000 in there now, something like that. So it's pretty decent, but I've just put money in it every year and never taken a dime out. And so it grows without taxes, or it grows tax-deferred, and you can actually take it out at retirement without any penalties and use it and pay your taxes on it at that time.

If you use it for health anytime during there, there'd be no taxes, but it would not be a primary place to save. It would be only after you've done everything else. So, hey, good question. Open phones at 888-825-5225. Andrew's on Twitter. Dave, how do you rent a car without a credit card? I stopped carrying my credit cards and I found myself stranded recently in Nashville.

What's the workaround? Debit card. And I don't find myself stranded because I plan where I'm going to be and I find out if the local, you know, if the local version of one of the car rental places does that, takes a credit card. So I'm hearing rumors that Dollar is taking debit cards. And so you can check in on that. But just always verify ahead of time that the people you're dealing with take a debit card. There's nothing smart about smartphones if your wireless plan is blowing your budget each month. Pure Talk USA offers smarter wireless with unlimited plans starting as low as $20 per

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Just visit puretalkusa.com, enter promo code SAVEDAVE, no spaces, and receive 50% off your first month. That's puretalkusa.com, promo code SAVEDAVE. So I think it's appropriate following Cyber Monday that we have Giving Tuesday. I bet you didn't know it was Giving Tuesday. I didn't know it. James Childs knew it, our producer. He told me, Dave, this is Giving Tuesday. And I said, okay, James, it's Giving Tuesday. So that means we need to focus on giving,

which we're going to do a whole show on giving right up next to Christmas. And if you'd like to tell us your giving story, you can email me that at DaveOnAir at DaveRamsey.com. That's always our Christmas special of the Dave Ramsey Show, is giving and receiving. If you had a real cool story of something where you had the opportunity to be generous and give, then that's pretty incredible. And maybe you've had a cool story where you received something. And just email us and put giving in the subject line.

And that's DaveOnAir at DaveRamsey.com. But in honor of Giving Tuesday, we thought we'd talk to some people who give regularly. It's just kind of part of their rhythm. And most people do. One way you can give, obviously, is you can volunteer and you can cause things to happen in your community. Like a Financial Peace University coordinator. If you coordinate a class, you're giving. You're giving your time, your effort, your emotion, your spiritual self out there.

You're laying yourself out there for other folks to get the class started in your church and your community and to be there each night when the class operates. And there's nine lessons for a Financial Peace University member. You've got a one-year membership, but you go nine times, nine times during the week, one week, and nine weeks in a row, rather, one night a week, that kind of a thing. And the coordinators are the ones that put that together, and there's tens of thousands of them around America. Bob Ginty is one of them in Atlanta, Georgia, the Alpharetta, Georgia area.

Hey, Bob, how are you? Great, Dave. Thanks for having me on. Absolutely. Thanks for being on Giving Tuesday. And so what made you decide to be a Financial Peace University coordinator, to be giving in that way as a volunteer? Well, Dave, I think it goes back to my wife and I, you know, having experienced some financial problems of our own, you know, we got ourselves into, you know, $75,000 in debt and really were pretty, pretty hopeless. So in finding out about

you, you know, I think I mentioned that we saw you, happened to see you on 60 Minutes back in 2004. Wow. That was the first we heard of you. Yeah, that was the first we heard of you. And we happened to go to an event a couple, three weeks later that just happened to be in our area at North Point Church. Saw you live, and from there we took financial peace ourselves. You know, we were really excited about that, and we were able to, within a year and a half after the class, knock out our $75,000 in debt.

And we just were so pumped about that that I just felt like I have to carry this on and take it to my church so that, you know, other people can have hope where they're not having hope today. You know, one of the interesting things about giving, and I think it's especially true of volunteering, it's also true when you give money, when you do it on a personal level, not a check through the mail to somebody you never meet but when you do giving of some kind on a personal level is you end up the paradox is you end up getting more out of it than you give in like you get to you got a front row seat to watching people change their lives and it it you know it's like people say well you work so hard dave i'm i don't work man i mean i'm down here helping people and every day is fun because I get a front-row seat like you have there to watch people change their lives. I would imagine.

How many classes have you led, Bob? I'm 34 so far. Oh, my gosh. Well, you've definitely got some stories then of lives changed, right? Oh, yes, definitely, Dave. You know, just this last class, I mean, I can just tell you even by the tenor of it, it started out as the first, you know, week. I was kind of like, oh my gosh, everyone's so tense, right? You know, some people definitely got drugged there and were very nervous

about the whole situation. But you could even just see just even how people related to each other, how couples were relating to each other as the class went on. You could tell that they were communicating and improving and whatnot. So you get that sort of thing just right during the class. But I do have people come back to me afterwards. And interestingly, one of the most common things people come back to me on, especially this was happening during the meltdown a few years ago, is people would come up to me and shake my hand and say, you know, I really appreciate you coordinating because I lost my job.

And because we had a fully funded emergency fund, we were able to get through it without really any stress. And we really appreciate that. So I always think that was kind of an interesting one where, you know, people really felt appreciative. But that's one of the examples I had. Yeah, absolutely. But you do get more back out of it than you give in, don't you? Well, absolutely. I mean, you know, for some of it, I mean, some of it is, you know, obviously that people do well and they let you know how well they're doing

and you can see people have hope, right, out of hopelessness, and that's very rewarding. And, you know, you get a little bit of a clash yourself because it's constant reinforcement for you, too, that, you know, this is the way to stay on the train and keep going forward, you know, forever. So, I mean, I think both sides you get. You get the benefit of seeing people change and also keeping yourself on track. Thirty-four classes since 2004. Wow.

That's right. So what keeps you coming back? Well, and my wife and I were talking about this the other night, uh, you know, Sherry and I were talking about this last night. Um, you know, when I first was doing it, I was thinking about, you know, kind of in terms of, you know, getting it going and, um, you know, not really looking at it as a long-term thing. But a couple things happened. Obviously, one of them is I was really passionate about it, and even if I'm really tired, when I go to class,

it just energizes me to be in there and talking to people about this stuff. But the other thing is I started to learn about spiritual gifts. You know, as I was going through my Christian walk. And, you know, I realized along the way that, you know, God wants us to do the things and help out in ways that we're good at, right? Things we're good at and things that, you know, are fun and energizing for us. They don't want us to do painful, awful stuff. And I realized that this was a spiritual gift that I had in order to give back. And so that kind of made me realize this is something I'm going to continue doing it as long as I possibly can.

Well, we appreciate you. We really do. Bob Ginty, Financial Peace University coordinator extraordinaire in the Alpharetta, Georgia area. Mount Pigs United Methodist Church. Are you currently in the middle of a class? Well, we just finished one up, but we have another one scheduled to start at the mid-January. Perfect. So we're getting ready for that.

Perfect. Well, you've seen a lot of versions of Dave over the years. We have. We have. We're ready for the next one coming out, too. Good times are on the way, my man. Good times, I'm telling you. Hey, man, thank you so much for leading Financial Peace University.

We really, really appreciate it. It is Giving Tuesday, and so we thought we would spotlight a coordinator extraordinaire. I mean, 34 classes. Absolutely amazing. Absolutely amazing. Absolutely amazing. Hey, if you want to lead one of these Financial Peace University classes in your community, now's a good time to talk about it. You could get your class set up for January and be ready to go

because there will be a lot of people with New Year's resolutions ready to get on a budget, get out of debt, save and invest, become wealthy, and be in a position to be outrageously generous, all that stuff, right? If you're interested in giving this way to your community, you can get $20 off everything you need to lead a group right now. All you do is get in touch with us. Text the word LEADER to 33789. The word LEADER to 33789. The word LEADER to 33789.

Or just go to DaveRamsey.com and click on Financial Peace University. I'm being a coordinator. Our team will be in touch with you and make sure that that happens for you. So very, very cool stuff. Love it, love it, love it. This is the Dave Ramsey Show. Okay, things are getting pretty weird out there. I thought the Equifax breach was bad enough. It exposed the personal financial info of half of all Americans.

Now we have breaches affecting almost every U.S. citizen, and the data stolen is more personal and equally dangerous. One company had over 230 million consumer files hacked, which included not only the home address, but info related to religion, pet lovers, smokers, you name it. And the businesses were not any luckier this time, with 110 million files hacked. It really is no longer a matter of if it's when you'll become a victim. That's exactly why the only plan I've ever recommended is through Zander insurance. They cover all types of identity theft for families and businesses, and they take over all the work.

If you become a victim, I use it for my family and my entire team call 800-356-4282 or visit Zander.com. That's Zander.com. Amy's with us in Kansas City. Welcome to the Dave Ramsey Show, Amy. Hi, Dave. Thank you so much for taking my call. Sure. What's up?

Well, here's my question. We just finished Baby Step 3 and entered stork mode. Should we start Baby Step 4 and six now or just pile up money so how much is in your um uh emergency fund twenty thousand okay um i think you can go ahead the only reason i would say yeah i mean go ahead with baby steps four five six i mean there's not if something occurred with a pregnancy you have twenty thousand dollars right right right you have a fully funded000, right? Right, right. You have a fully funded emergency fund.

That's what it's for. I only tell people to pause it in the other baby steps because they don't have their emergency fund yet. Right, right. But you do. You've done a great job. Congratulations. Thank you. So you're debt-free, huh?

Yeah, it's very exciting. We love your show. Big fan. Well, I'm honored. How old are you guys? I'm 31, and my husband's 33. And what number baby is this? First.

First one. Awesome. Yeah. Yeah, super exciting. Well, very cool. Good for you. Yeah, I think you're okay, don't you? Yeah, I just wanted to see what you thought.

I haven't been able to figure out what you would say about that. I've only heard you talk about Baby Step 2. Yeah, well, it usually comes up in Baby Step 2 or even 3, but 3 is obvious. You're just the same thing. You're piling up money. But you've got your money piled up. I don't get this question very often. That's why you probably couldn't find it.

But it's a really good question, a really good point of clarity, because the other ones you just don't have the money yet and so we want to stop our baby steps temporarily push pause if you're you know trying to get out of debt and and build up some cash and be prepared for a pregnancy and then when mommy and baby come home and everything's good you've heard that a thousand times right you don't you dump all that on baby step two and go on but you're past that so way way to go. Good job. Congratulations. Victoria is in Los Angeles.

Hi, Victoria. How are you? Hi, Dave. I'm fine, thanks. Sure. What's up? So I'm calling because on behalf of my mom, she has a life insurance policy that's Pacific Life, and it's a whole life policy that she bought in 1981.

I'm sorry. And in 1997, she had some issues, and I've been taking care of her ever since. And going through a bunch of boxes recently, a few years back, not really recently, I realized that she had a life insurance policy that she was still getting mail on, and they were premiums, and I asked her what it was, and she said she thought she stopped paying on that a long time ago and that it wasn't valid so i called them and found out that it was still valid and what was happening is they were paying the premium for her and putting a loan against

her policy oh nice okay so where does it stand today so today well last year what i did today it's um that's what i was going to call you about um it's right now so last year there was um some money in there they call it a paid up cash value um amount and i don't know how she had that because they have a way of accruing money but you still have a loan against the policy so i'm not sure how that works because i'm not really privy to the industry like that but um there was money in there, and it was several thousand dollars, and she owed something like $35,000 in a loan against the policy that was accruing interest at the rate of 8%. And I was talking to a customer service guy over there last year before I was paying the

premium, and I was trying to hash this out with him and see if there was something I could do to stop the gap, you know, stop the bleeding. And he said, well, you could take up all your paid additions, paid up additions, and pay off some of the loan, and then you'd have a smaller loan that you could, like, start making payments on the policy and start... Okay, so you have a $35,000... She has a $35,000 loan against her cash value. What that tells us... But she did have that.

And then we talked it over, and she agreed that we should go ahead and pay that down. Oh, okay. And so we did. And now there's zero paid-up additions. The total death benefit before the loan is $25,000. What's left in the current cash value before the loan is $17,125, and the current loan debt is $14,462.76. The current net debt benefit after the loan is $10,537.24,

and if she were to just cash out today, the current cash value is $2,662.24. Are you not tired of getting screwed yet? No, I think... Cancel this crap today. Right. So that's what I'm calling, because they sent me a check for $350. They sent her a check for $350.08. It looks like they took the annual dividend of $912.58, and they paid off the annual premium of $560,000.

You realize what's happened? Let's kind of talk through this for a second, okay? Here's why you should cancel it today. Once you understand it, you'll go, oh. So basically, whole life life insurance, it costs about 20 times more than term life insurance. That extra 19 times that you're paying in goes into a savings account called cash value. You pay extra, a lot extra, to build up the savings account. Okay?

That's her cash value. And then what did she do? She borrowed against her cash value. She borrowed her own money and paid them interest. This is why I hate these people. It's such a screw job. I feel like she's been paying on something since 1981. It's gone.

I mean, the money's just gone. And so here's what happened. Here's what happened. Not only did she borrow her own money and pay them 8% to do this, but then they took the premiums and borrowed more money against her savings so that they could keep their stupid policy in force. Yeah. So she's been borrowing her own money and paying them interest to borrow her own money to buy a life insurance policy that now nets her $10,000 after all these years if she dies or $2,000 net of all these loans if she catches it in today. This is not going to get anything but worse.

It's a trick bag. And because there's a loan on it, like if there wasn't a loan on it, I could just leave it alone, I guess, and not have to buy it. So canceling it, can you roll it over into a term life? You don't need to. Just cancel it. Okay. Just cancel it.

Her health is bad. But, you know, the money that is tied up, take the $2,000 and any of her other assets and start setting that aside for her burial if, God forbid, something happens to her. But this is just, it's gone. I mean, they have used her up is what it amounts to. And you can see that in the math, can't you? Yes.

Yes, because I thought paying all those, and then I was thinking now, in hindsight, should I have even considered no you should have canceled it before you did all the paid up additions out but it's not the end of the world that money there's not there's no taxes on it because your your basis i'm sorry they use the cash last year when they used the cash to pay off some of the loan some of the loan, some of the loan down. They called it her paid-up additions. She got, I guess, a W-9, her 1099, rather, and she had to pay taxes on whatever that amount was, and it was like $800 and some odd, I don't know. You shouldn't have.

There shouldn't have been any taxes on it because your basis in a whole life policy is the total of your premiums paid in, and there's no possible way that her premiums are that she's going to get out of this thing what she has paid into it never in a million years so um which you can do is file an admitted return when you cash this one out because all you get is go back and look at all the money she's paid into this? And she did not get it all out. No. And so there's a net loss.

There's not a net gain. And she's too old, apparently, because I talked to Larry and Xander yesterday, and she's too old to even buy life insurance. Yeah, but she doesn't need life insurance. I mean, she doesn't have any life insurance now. She just got a trick bag now. I mean, $10,000 worth, but my God, what you're paying for this ten thousand dollars is astronomical yeah it's not worth it admitted return is is a form that i can get from the tax preparer i'm sorry say that again to file an omitted return an amended return you do that when you file her taxes this year go back and amend last year's

filing because the taxes you paid on that $800 shouldn't have been paid. Oh, it was taxes on $22,000. Did you get a $35,000 loan? Oh, my God, these guys. No, you need to get proper documentation from them on the total of the premiums paid in. That is your premium. I mean, that is your basis, and it's way in excess of $22,000. God, man, what crooks.

Unbelievable. So, yeah, you've got to get Dave Ramsey Show. Hi, how are you? Samantha is in Wichita Falls. Hi, Samantha. Welcome to the Dave Ramsey Show. Hi, how are you? Better than I deserve. What's up? So, I am on Baby Step 2.

I am slated to be debt-free by the end of December of 2019. I'm currently under an employee contract until March of 2020. And at the end of that contract, I do not plan to stay at my current job. So I was wondering, whenever I'm done with Baby Step 2, would I even worry about contributing to the 401k that my employer offers for those three months? No, because you'll be on Baby Step 3, which is saved for your emergency fund, and build it up at three to six months of expenses.

I doubt you'll get that done during that three months. Then and only then would you move to baby step four, which is put 15% of your income away into retirement. You can do that with Roth IRAs. You can do that with your current company. But at that point, you will have changed companies. And so, you know, you'll have to see what you've got there. Absolutely. Okay, I was just making sure, and my hope is that I can be gazelle-intensive and get it done before then,

but December of 2019 is a hard goal for me, so I'll just wait and see. Well, to your point, let's say that by December of 2019, you had your emergency fund done, baby step three. Would you start a 401k for only three months? Nah. Nah. But I would start my Roth IRA or something else, you know. But I wouldn't do a 401k with a company I know I'm not going to be with for three months. All right.

Thank you so much. Hey, thanks for the call. Nick is with us in Washington, D.C. Hi, Nick. How are you? Hey, Dave. Better than I deserve. How are you? Hey, Dave. Better than I deserve. How are you?

Just the same. How can I help? So I had a question regarding some of my debt. I had a credit card that ended up going to a debt collector, and now I actually just checked on my credit journey on my bank account that I have a charge-off, and the payment status is on collection charge-off. So I didn't know the best way to get the delinquent money away from the debt collector

or go straight to the bank to get that off and the best way to get the charge-off off that credit. Well, settling it as fast as possible was the best way to get it off of your credit. It'll still show as a bad debt, but a bad debt that has been made good, which is really your only option at this point. That's what you would do. How long ago did you stop paying on the card? How old is this bad debt? The bad debt's about six months it's yeah about

six months since june okay um not sure uh who's it with which company uh i'd have to i'd have to double check i can't see it unless i got off my phone okay that's all right i mean it was it wasn't with your local bank or something like that then? It was with a bigger commercial bank is where it came from. Yeah, that's what I'm asking. Who was it originally with? It was originally with M&T Bank. Okay.

There's a possibility with a bank that size that you're not dealing with a debt collector. You're dealing with that bank's debt collector division. Okay. Usually at six months, they don't sell bad debt. They might have. You can deal, but, I mean, it won't change anything. I would just go to the debt collector, whoever the last person to contact you is or whoever the last person on the credit bureau report is, and get in touch with them.

Now, here's a couple things to remember when you're dealing with a credit card collector you are dealing with the bottom of the bottom of the collections industry which is already a filthy industry you can tell they're lying if their mouth is moving okay so whatever they say to you just ignore it okay you know what the original amount you owed was right yes it's uh 65 uh the original amount i think it was about 50 5500 and it may be 12 000 when you call it it may they may have jacked it up it may be 12 000 when you call them they may have added on all these gotcha fees and stuff. A lot of them are illegal fees. If it is an actual debt buyer, meaning that your original bank has sold the debt,

they sold it for pennies on the dollar. They probably paid seven cents on the dollar for it. And so if it was a $5,000 debt, you know, they probably paid $300 or $400 for it. Okay. Now, I have $400 for it. Okay. Well, I have a question for you about that. Now, how would you go about paying that off? Would you go to your local credit union and getting a quick loan from them in order to pay them directly so they don't have access to my bank account?

Or how would you go about doing that? You don't have any money saved to settle this with? I have about five grand saved up right now. Oh, that's enough. Yeah. I'll just make them a $5,000 offer. You don't need to get a loan. Okay.

And because they're going to have jacked it up. It's not going to be $5,642 or whatever it originally was. They're going to have added not only interest and late fees to it, but they're going to have jacked it up. It's not going to be $5,642 or whatever it originally was. They're going to have added not only interest and late fees to it, but they're going to add collections charges and a bunch of other crap, and you're going to hear just ridiculous, you're going to have ridiculous conversations with people whose parents are cousins. I mean, you're just getting ready to go down a rabbit hole, dude, okay? So just get yourself mentally steeled for that,

because their goal is to milk this as far as they can milk it. And so you just got to repeat yourself like five thousand times. I have five thousand dollars. If you want it, here are the terms. I need to get an email from you saying you will accept that as settlement in full. Remember that phrase. I need to get an email from you that it says settled in full for $5,000 with the account number on it. When I get that, and only when I get that in writing, will I send you money. And when I send you money, I will either send it to you on a prepaid.

You can go buy a prepaid card if you want. But you cannot allow them to have electronic access to your checking account because they will clean you out. Do cashiers check work from one of my other accounts? Well, as long as there's not more money in the account than you settled for. Okay. Because they will clean you out. If there's $6,500 in there, they'll take it all.

They lie. Okay. We work with them every day.'re scum they lie and if you don't get it in writing and if you let them into your checking account you're going to have a bad day okay the money you thought you're going to pay your house payment with is going to be gone yeah so the best way to do is get a prepaid account charged money yeah just get your get your debit get your prepaid debit card if you want, one of the paid-up cards. That's an easy way to do it. Or you can send it to them by wire or whatever.

I mean, pay well, whatever. You just wire it, whatever you need to do. But don't let them in your main account, and don't let them in an account that has more money than that. And don't give them any money until you get whatever promise you agree to in writing. Because if it's not in writing, it didn't happen. And then you staple proof of payment to a hard copy of that email that you get, and you keep it in a file the rest of your life, because this may come up again. They may call you and try

to collect it again after you've settled it and you go uh-uh i've got the proof of payment and i've got the proof of the amount that was settled by such and such a time and i owe you zippo and if you pursue this i'm going to take you to the federal trade commission because you're going to the problem is when you get down and you're dealing with people of this low character you just get into all kinds of problems okay so just treat down and you're dealing with people of this low character, you just get into all kinds of problems. Okay. So just treat it like you're dealing with rattlesnakes, right? Gotcha.

Hey, man, thanks for the call. Get it cleaned up and get it out of your life. And, of course, close those accounts and make sure you don't have any more credit cards in any one of these issues. Open phones at 888-825-5225. We're glad you're here. 888-825-5225 we're glad you're here 888-825-5225 if you're just joining the dave ramsey show and you've never been with us we've been on the air here for 27 years or so pretty much saying the same thing over and over again common sense live on less than you make.

Get on a written plan called a budget. Every dollar is the easiest way to do that. It's the world's best app, and it's free for you to use. Get out of debt, because if you don't have any debt, you've got money. And that allows you to save and invest. And people who don't save and invest don't build wealth. You consume everything. You're a consumer. You're not a producer. Stop being a consumer. Stop consuming everything. And if you do those things, you're on a plan, you're out of debt, you're building wealth, you're in a position to do the other part of money, which is the most fun you'll ever have with money. And that's be

outrageously generous. Merry Christmas. We're glad you're with us. This is the Dave Ramsey Show. Hey, it's Kelly Daniel, associate producer and phone screener for the Dave Ramsey Show. Did you know that in 2017, Dave Ramsey Show listeners paid off $50 million of debt? That's pretty impressive, and it could be you this year. Keep listening for more inspiration.