How to Deal With Loan Collectors--Even if They're Related

Dear Dave,

I borrowed $30,000 from my aunt to buy a condo eight years ago. We had a deal that she would get her money back, plus a piece of the profits, when it sold. If there were no profits, she would get back her original $30,000. Recently the condo sold and I lost the money I put into it, plus my aunt’s money as well. I make good money and don’t have any other debt, but I’m a little resentful now that she wants me to pay her back. Do you have any suggestions?

Christine

Dear Christine,

I don’t want to be mean, but you have no right to be resentful toward your aunt. This is the deal you signed up for, and she did nothing wrong. Wanting her money back now isn’t greedy or malicious on her part, and it’s definitely not worth putting a family relationship at risk.

I know what you’re thinking, because it’s just human nature. You just went through a lot, and the situation didn’t work out as planned. Plus, it doesn’t sound like your aunt is hurting financially if she put $30,000 toward helping you in the deal. Part of you is thinking she has plenty of money, so why doesn’t she just forgive the debt and forget about everything?

If you were barely scraping by, I might suggest that you sit down and talk with her over a cup of coffee, explain the situation and ask her to forgive the debt. Right now, the little girl part of you is whining, “Oh, come on. Just let me go!” But the grown-up Christine knows better. That part of you is whispering, “You know what to do…”

Pay her back as quickly as possible, and get this bad deal behind you for good. You said you make good money, so just take care of your responsibility. It’ll hurt some, but it’s better than taking a chance on ruining the relationship with a very generous and loving aunt.

-Dave

Dear Dave,

I’m working on my debt snowball, and I’m trying to settle with a pushy collector. I don’t have the $9,000 I owe, but I have $3,000 I’d like to offer as a settlement. Recently the collector has started asking for a lot of information I don’t feel comfortable providing. What should I do?

-Daniel

Dear Daniel,

Lots of times in these kinds of situations collectors are trying to gather up as much information as possible in order to sue you. Even if that’s not the case here, there’s no reason for you to be supplying them with a bunch of extra info. Just offer them the $3,000, and make it clear that your financial coach—which is me—told you not to answer any more of their nosy questions.

Make sure they understand that your offer of $3,000 stands as a settlement of the debt today. If they’re willing to accept the offer, get a statement in writing saying that the $3,000 represents payment in full before you cut the check. If they choose not to accept your offer, and they keep asking questions that are none of their business, just tell them to call back when they’re willing to discuss terms. Then, hang up!

-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 6 million listeners each week on more than 500 radio stations. Follow Dave on Twitter at @DaveRamsey and on the web at daveramsey.com.