Dear Dave,
I have a credit card that I haven’t made a payment on in almost two years. The debt has been sold a couple of times, and now a collector is saying I owe $1,200. The original amount was $500. I’d like to work something out, but I can’t afford $1,200. What should I do?
Luanne
Dear Luanne,
They’re asking for $1,200 because they’ve added things like interest and late fees. They want to make as much money as possible on an old debt they bought for pennies on the dollar.
If you can afford $500 right now, ask if they’ll accept a one-time payment to settle the account. Get it in writing if they accept the offer, and don’t give them a penny until after you get a copy of the written agreement. Once you have the agreement in hand, send them a money order or cashier’s check for $500. Do not, under any circumstances, give them electronic access to your bank accounts.
You waited too long to take of your obligation, Luanne. That made things more difficult and more stressful than necessary. I’m glad you decided to do the right thing, and clean up your mess, though. Better late than never!
—Dave
* Dave Ramsey is CEO of Ramsey Solutions. He has authored seven best-selling books, including The Total Money Makeover. The Dave Ramsey Show is heard by more than 13 million listeners each week on 585 radio stations and multiple digital platforms. Follow Dave on the web at daveramsey.com and on Twitter at @DaveRamsey.
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