Don't Allow Collectors Access to Your Money

Townhall.com ^ | December 26, 2012 | Dave Ramsey

[Kaslin]

Dear Dave,

I’m trying to help my son and daughter-in-law by encouraging them to get out of debt and live on a budget. It hasn’t been a problem to give them money when they’ve asked in the past, but I’m afraid they’re still in a mess. How can I make sure I’m doing the right thing?

Margaret

Dear Margaret,

The first thing you need to do is sit down and have a serious, loving talk with them. If they’ve asked for money before, and it has become something of a trend, you have a right to know more about their circumstances. In addition, they need to understand that opening up and being honest about their situation and behavior is a requirement for them to receive more of your help.

I know you guys love each other, but be prepared for them to get defensive. Lots of times people are embarrassed to talk about their mistakes, no matter how nicely you approach things. They may decide not to answer any questions and that it’s none of your business. That’s fine, too. Just make sure they understand Mom won’t open her checkbook unless they open up about their finances.

This isn’t about you being nosy or controlling. It’s about making sure you’re not giving a drunk a drink and further enabling any misbehavior. Then, if they’re willing to talk, and as a result, you feel they truly need help, make sure any money you give them is a gift, not a loan.

I know it hurts to see them go through rough times, Margaret. But if they’re acting irresponsibly with money, they need to suffer the consequences of their actions. That, along with your love and advice, can help them turn the corner and win with money!

—Dave 

Dear Dave,

I have one bill left from an emergency room visit earlier this year, and I’m trying to settle with a collections agency. They’re willing to accept half of the $930 owed, but they want me to pay online or by phone, and I don’t feel safe doing that. What should I do?

Allison

Dear Allison,

If they’re willing to lower the bill by half, then you need to get that in writing. If you don’t have it in writing, you don’t have a deal. And whatever you do, don’t give them any form of electronic access to your money. I’ve seen too many collectors lie to people about “agreements,” then go in and raid their accounts.

Just tell them to send you, by email or regular letter, a statement saying that $465 will be accepted as payment in full for the debt. Also, tell them you’ll turn around the day you receive this letter and send them a cashier’s check for that amount. Until then, they can go jump in the lake!

—Dave

* Dave Ramsey is America’s trusted voice on money and business. He’s authored four New York Times best-selling books: Financial Peace, More Than Enough, The Total Money Makeover and EntreLeadership. The Dave Ramsey Show is heard by more than 5 million listeners each week on more than 500 radio stations. Follow Dave on Twitter at @DaveRamsey and on the web at daveramsey.com.

[CSM]

Yes, go to www.daveramsey.com and on the right hand side of his web page you will see a section called ELP’s, it stands for Endorced Local Providers. It is a screened database of different financial service providers that are in your specific area. I can tell you that Dave and his team are VERY stringent on those service providers.

OK, just under that section you will see a link to find a “financial counselor” that is actually trained by Dave’s team to help folks with debt and debt collectors. Contact the one that pops up closest to you....

I agree with you, I think that what BofA did is illegal as well. It could very well get the entire debt cancelled or forgiven...

[discostu]

If you do pay off the card make sure you do it out of his account or an estate account NEVER yours. If you do it out of yours all of his creditors can claim you’ve taken responsibility for his bills.

On the other hand unless he actually said in his will to pay off his debts ignore them.

[Hoffer Rand]

Under the law, Power of Attorney ends when a person dies. Your POA terminated when your dad passed. Nobody should have accepted that as legal reason to do business with you on your dad's behalf. You would need something that gives you postmortem status. Unless you're the executor of the estate, BofA can't hold you legally responsible for your dad's bills. Even then, they can only hold the assets of the estate against any outstanding debts the estate has, not you personally. They can't just attach your name to your dad's CC. That's not legal.

[A_perfect_lady]

To add to what usconserative said, don’t ever pay a single cent on your dad’s Visa. If you do, they can make a legal case that by doing it you assumed responsibility for the whole debt. Then you really are screwed.

[Still Thinking]

On the other hand unless he actually said in his will to pay off his debts ignore them.

I thought that creditors by law got first crack at the estate before heirs did. Is that not the case?

[discostu]

Depends on the laws of your state. Also depends on the size of everything. All the estates I’ve helped cleanup were small enough to get parted out before the creditors even got to find out. With everything closed they got death certificates and no cash. Of course nobody was owed more than a couple grand so they just wrote it off. Qwest was the worst, they just could not wrap their heads around “she’s dead turn the phone off” then they spent years hassling me for the money for the months they wouldn’t turn it off. Kept telling them if they’d turned the phone off the first time I told them to and sent a certificate nobody would owe them anything.

[WashingtonSource]

It was not B of A that gave unsecured mortgages to illegal aliens. It was Countrywide, run by Angelo Mozilo. B of A bought Countrywide and with it, all the problems from the fraud and abuses that Mozilo did while raking off a billion dollars into his own accounts and leaving the company in dire straits.

B of A was one of the few large banks that did NOT do subprime lending. They got out the business ahead of the housing bubble. They goofed, however, in buying Countrywide. They are still paying for that mistake.