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  • Dave Ramsey Says - Paying on debt that is in collections?

    Should you still pay on debt that is in collections?

    Dear Dave,

    Should you still pay debts that are in collections, even if they have been dropped from your credit report? The one in question is from 2011, and I assume it isn’t showing on the credit report anymore because it’s nine years old.
    Sam

    Dear Sam,
    There are two good reasons to go back and deal with this debt. One, even if it’s off your credit report, you may still legally owe the money. Even if the statute of limitations has run its course, things like this have a habit of popping up and causing problems at the worst possible times. About the time you decide to buy a home, this is liable to raise its head again and mess things up. So, the fact that something doesn’t appear on a credit report doesn’t mean you’re not legally liable, or that they won’t bother you about it later.
    The second thing to think about is a simple matter of fact—you owe the money. Regardless of what the legal system or credit report says, you morally owe the money. I’d contact the creditor, and begins negotiations to settle the debt. You might be able to reach an agreement where they’d accept less than the original amount owed. Regardless, get any type of settlement offer in writing. That way, you’re truly cleaning up your life and getting rid of any financial skeletons in your closet!
    —Dave   

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