Financial Advice From America’s Financial Advisor
Pay It, But With Caution
I got a department store credit card, using my real age at the time, when I was 17. I ran up a debt of $150, and the balance has grown to over $350. This was 10 or 12 years ago, but a debt collection agency started calling again the other day wanting the money. Hasn’t the statute of limitations run out by now? What should I do?
There is a statute of limitations, but there are a couple of other things to consider, too. First, the debt is not collectible because a minor alone cannot enter into a legally binding contract in any state. The second thing is they can screw up your credit report for a very long time, and it sounds like they’re in the process of doing that right now.
Here’s my advice. Call them and explain that they are past the statute of limitations, and that you are considering suing them. After that, remind them that you were a minor when someone approved you for the card, which means the store you signed up with can be sued as well.
However, since you did take stuff from the store, offer them the original $150 to settle the deal. Get it in writing that the account is settled in full by this amount, and don’t give them electronic access to your money. When you get the settlement offer in writing, keep a copy of the letter and a copy of the cashier’s check you’ll use as payment.
Pay it because you owe it, Elizabeth. It’s a moral issue. And hopefully as a result you can get these kinds of people out of your life for good!
My husband and I are 28 years old. We’re completely debt-free, and we each have great jobs. We don’t talk a lot about this kind of stuff, because we’ve found it causes other people to treat us differently. We realize how incredibly blessed we have been, so we always try to give God the credit, save, tithe and give regularly, and not brag about these things. How would you recommend handling a situation like ours?
When you start to win with money, build wealth and achieve some of your goals, you discover pretty quickly that there’s a very small group of people you can celebrate with. It sounds like you’ve discovered this already.
A lot of times there are friends, and even family members, you can’t celebrate with because it comes off as bragging — even if you’re just happy you’ve reached a milestone. So, you learn to keep lots of stuff private and not even share the good things. Still, if you have a nice car or a beautiful home, these things can indicate that you’re successful. Even if they’re a small percentage of your financial world, it will sometimes generate feelings of jealousy or envy in other people.
Jealousy is, “I want what you have.” Envy is, “I don’t think I can have what you do, so I don’t want you to have it either.” These are two really evil spirits, and they’re loose in our country today like never before. Part of the price of making smart decisions, and being wise with your money, is that some people don’t understand when you win and don’t think it’s fair.
But the truth is that you guys have every right to enjoy the fruits of your labor. You’ve earned it. You’re generous, giving people, and you take care of your family so the rest of us don’t have to pay extra taxes to take care of them for you. That’s the truth about winning with money. You guys are under no obligation to explain your income, net worth or the fact that you’re winning. And you’re not obligated to be ashamed of it either!
Dave Ramsey is America’s trusted voice on money and business. He has authored five New York Times best-selling books. The Dave Ramsey Show is heard by more than 8.5 million listeners each week on more than 550 radio stations. Dave’s latest project, EveryDollar, provides a free online budget tool. Follow Dave on Twitter at @DaveRamsey and on the web at daveramsey.com.