You owe how much?!

Thursday, Jul 26 in Debt consolidation | Comments (0)

Question: Jay and his wife are disagreeing. She doesn't want to consolidate their debt into a home equity loan, but he does. Dave tells him why he's wrong, and how to think with your heart as well as your head.

Dave Ramsey's answer: Consolidating your loan may make mathematical sense, but unless you change your behavior, you'll go right back into debt. Your income vs. your debt is way out of whack; how messed up is it that you make $30,000 a year and owe $21,000 on a truck?! That is absolutely ridiculous! Sell that truck so fast your head will spin. You guys are on an EXTREMELY tight budget and you need to change. Your wife is right; a home equity loan won't fix anything. Get on a written money plan and sell that truck!

Listen to the call

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So much for debt reduction!

Wednesday, Jul 25 in Debt consolidation | Comments (1)

Question: Suzanne and her husband went through a debt reduction company and have paid about $5,000 in the past year. The company has not paid anyone yet. They signed a power of attorney contract. Dave's opinion is strong.

Dave Ramsey's answer: This is absolute madness to give someone $5,000 and lose control of your life like this. Send them a letter saying that you will send no more money, and revoke all power of attorney privileges. Send a certified latter, return receipt requested. Get on a plan and call your creditors and start to work on this. You were trying to do something good and got ripped. There is NO REASON that this would take a year for them to do this job! You'll do a lot better taking this into your own hands.