Dear Dave,

 

I’m on Baby Step 2. I’ve paid off almost all my debt, and I’m living on a monthly budget. Recently, I got a call from a debt collection company about an old medical bill. They threatened to garnish my wages, and from the way they talked I’m afraid they may actually do it. How should I handle this situation?

 

Gwen

 

Dear Gwen,

 

First of all, they won’t garnish your wages. They can’t. For that to happen, they would have to go through all the formal, legal steps of suing you, and then they’d have to win the case. Debt collectors like to play with people’s emotions because, many times, folks will give in and do whatever they want—whether they can afford it or not.

 

The worst thing you can do in these situations is react with panic or fear. Talk to them calmly and rationally, and explain your financial situation. You may be able to reach a compromise that works for both of you. If they get nasty, or continue to lie to you, let them know you’ll file a complaint with the FTC (Federal Trade Commission). Pushy debt collectors have a habit of getting polite and reasonable in a hurry when faced with the possibility of the federal government stepping in.

 

Do everything you reasonably can to pay your debts, Gwen. You owe the money, and that means you have a legal and moral obligation to pay them. But you don’t have to put up with a collector’s lies and harassment!

 

—Dave

 

 

* Dave Ramsey is a seven-time #1 national best-selling author, personal finance expert, and host of The Ramsey Show, heard by more than 18 million listeners each week. He has appeared on Good Morning America, CBS This Morning, Today Show, Fox News, CNN, Fox Business, and many more. Since 1992, Dave has helped people regain control of their money, build wealth and enhance their lives. He also serves as CEO for Ramsey Solutions