DAVE RAMSEY: Has the limit on bad debt passed?

By Dave Ramsey

Q: I bought a car a few years ago and purchased new wheels for $1,100 on credit. I haven’t paid the bill, and now collectors are trying to settle with me. I think the statute of limitations has expired. Should I still pay the debt?
A: I always look at things like this through two or three lenses. One has to do with your credit. Another is the legal aspect, and the third is this: What’s the right thing to do?
The right thing to do is pay the debt. You took the wheels, so you need to pay for them. You could probably scratch together $1,100 and make this whole thing go away. I’m pretty sure a lot of legal and collection costs, as well as interest, have been added over the years. But at this point, you can probably get them to settle for the original amount owed.
Now, can they still chase you under the statute of limitations? That’s a matter of state law, and since I’m not an attorney, I’m not up to speed on every law from state to state. Besides, I don’t like the idea of using that kind of argument to get someone out of debt.
Honestly, this is the real world we’re talking about. You’re going to have to deal with this, because even if there is a statute of limitations, most collectors will still try to chase you to the ends of the earth. And for $1,100 you can get them out of your life and erase a big black mark from your credit. It’s always better to have a transaction listed as “bad debt that has been settled” rather than simply “bad debt.”
And by the way, it’s also the right thing to do.

Q: I’m a doctor, and I’ve been at my current job for six months. I’m scheduled to make $190,000 this year, and my husband and I will be debt-free in a few months. My employer provides disability insurance free of charge, but if I stop working for this company I’ll no longer have the insurance. Should I get my own policy instead of the one at work?
A: Unless you become se