DAVE RAMSEY

Dave Ramsey says: Pay off $3,000 co-signed loan in arrears if you can

Jan 24, 2023, 1:00 PM
(Pexels Photo)...
(Pexels Photo)
(Pexels Photo)

Dear Dave,

My husband co-signed a loan for an old girlfriend four years ago. Apparently, she hasn’t made a payment in almost two years, and a collection agency called him last week wanting the balance of $3,000.

We make about $80,000 a year combined, and an attorney we spoke with recommended we file bankruptcy. Is this really the best thing to do?

Scarlett

Dear Scarlett,

If you have the money, and you can pay it off without putting yourselves in a bind financially, do it. That’s the right thing to do, both morally and legally.

If you don’t have that kind of cash on hand, try haggling with them. See if they’ll agree to settle for $1,500. At this point, they might even take less. But if they go for the idea, do not give them electronic access to your bank account. Make sure you get the agreement in writing, too, before sending them a penny.

Here’s the deal. This collector bought the loan for pennies on the dollar. It’s an old debt, and that means the expectation for collection is very low.

At the same time, your husband did co-sign for the loan. They’ll probably threaten to sue and whatnot, but my guess is you can work something out. It might take two or three weeks — and a little patience — but that’s a small price to pay if it saves you a bunch of money.

Oh, and the attorney you talked to? He doesn’t sound very bright. A bankruptcy stays on your record for years. Trashing your financial life over $3,000 would be stupid.

Good luck, Scarlett!

Dave Ramsey

(Pexels Photo)...
Dave Ramsey

Dave Ramsey says: Remember to be a team when tackling finances after layoffs

A couple getting through double layoffs in the household should focus their finances on day-to-day and hold off paying down debt.
7 days ago
(Pexels Photo)...
Ken Coleman

Is enrolling in college the best choice for you to find success?

More and more people are wondering if they should spend the time and money to attend college when they can get a job without the expense.
9 days ago
(Pexels Photo)...
Kristina Ellis

What you can do this year to work toward being student debt-free

Let’s review what happened with student loans in 2022, look ahead at what’s coming, and talk about what to do to work toward being debt-free.
16 days ago
(Pixabay Photo)...
Dave Ramsey

Dave Ramsey says: Parent should learn to take better care of personal finances

Bailing out a person who is irresponsible with money won't help them. But if you do, make the payment contingent on financial counseling.
21 days ago
(Pexels Photo)...
Rachel Cruze

Tips for 1st-time budgeters to take control of your money in 2023

Getting your finances in order can feel big and overwhelming, but we’re going to break it down in a way that’s simple and manageable.
22 days ago
(Pixabay Photo)...
Dave Ramsey

Dave Ramsey says: Talk to probate attorney about ins and outs of windfall from handwritten will

A handwritten will doesn’t necessarily invalidate it, but it does increase the possibility of encountering some bumps down the road.
28 days ago

Sponsored Articles

...
Day & Night Air Conditioning, Heating and Plumbing

Company looking for oldest air conditioner and wants to reward homeowner with new one

Does your air conditioner make weird noises or a burning smell when it starts? If so, you may be due for an AC unit replacement.
...
Quantum Fiber

Stream 4K and more with powerful, high-speed fiber internet

Picking which streaming services to subscribe to are difficult choices, and there is no room for internet that cannot handle increased demands.
...
Children’s Cancer Network

Children’s Cancer Network celebrates cancer-fighting superheroes, raises funds during September’s Childhood Cancer Awareness Month

Jace Hyduchak was like most other kids in his kindergarten class: He loved to play basketball, dress up like his favorite superheroes and jump as high as his pint-sized body would take him on his backyard trampoline.
Dave Ramsey says: Pay off $3,000 co-signed loan in arrears if you can