Podcast Summary: "I'm 19 with $115,000 in Debt" The Ramsey Show Highlights Release Date: February 7, 2025

Introduction

In the February 7, 2025 episode of The Ramsey Show Highlights, the Ramsey Network addresses a pressing financial dilemma faced by a young individual grappling with substantial debt following a severe accident. Hosted by experts including Dave Ramsey, Ken Coleman, Rachel Cruze, Dr. John Delony, George Kamel, and Jade Warshaw, the episode delves into the complexities of managing unexpected medical expenses and debt at a young age.

Caller’s Predicament

At the heart of the discussion is a 19-year-old individual (referred to as "A") who has accumulated $115,000 in medical debt following a catastrophic car crash three months prior to the call.

• Accident Details:
  • Timeline: Occurred three months ago at approximately 60 miles per hour.
  • Injuries: Broke both legs, necessitating a week or two of hospitalization.
  • Employment Impact: Inability to work for the past three months with doctors projecting a recovery period extending one to two years, particularly preventing a return to construction work.

“A: I'm $115,000 in medical debt as of right now, and I'm 19 years old.” [00:02]

Financial Breakdown and Debt Implications

The caller explains the absence of medical insurance at the time of the accident, which exacerbates the financial burden.

• Living Situation: Initially lived independently in a travel trailer to minimize expenses but has since moved back with their mother during recovery.

“A: No, ma'am. I was living on my own in a travel trailer because, you know, it's the cheapest thing you can live in as a young teenager. But now I am. My awesome mother is taking care of me while I'm recovering.” [01:53]

Options for Managing Debt

The caller presents two primary options for addressing the $115,000 debt:

1. Settlement Negotiation: Attempting to negotiate a reduced settlement, potentially reducing the debt to between $60,000 and $80,000.
2. Non-Payment Consequences: Choosing not to pay, which would negatively impact their credit score and lead to debt collection activities.

“A: There are two options of how to handle the $115,000 of debt that I'm in. And it's to either, you know, counter them and say that I'm not going to pay it and agree on a lower settlement of, you know, 60 to 80,000 or whatever, or to just not pay it and let it really, you know, hit my credit score and let the credit score drop.” [01:09]

Expert Advice and Recommendations

Jade Warshaw and Ken Coleman provide guidance on navigating these options:

• Negotiating with Creditors:

  • Warshaw: Emphasizes the importance of not intentionally damaging one’s credit score, suggesting a cautious approach to debt negotiation.

    “B: I think that if it comes to that, that's okay. But I would not intentionally tank my credit...” [03:04]

  • Coleman: Advocates for reaching out to the hospital to discuss a hardship payment plan, leveraging the caller’s current inability to work.

    “C: ... go to the hospital and saying, hey, obviously this is the extent of my injuries... Is there some sort of payment plan I can work out that takes into account my hardship right now?” [04:13]

• Maintaining a Positive Mindset:

  • Warshaw: Encourages the caller to maintain hope and seek feasible solutions without succumbing to despair.

    “B: ... I don't want you to go into this with a hopeless mindset of saying I'll never be able to pay this off because I don't believe that. I think you can.” [04:20]

• Future Income Prospects:

  • The caller discusses a potential future employment opportunity through their father in the oil field, which could provide a more stable income to manage and eventually pay off the debt.

    “A: ... through my dad... a desk job out there that would pay better than construction... that was the plan either way.” [03:04]

Key Takeaways and Conclusion

The episode underscores the importance of proactive communication with creditors and exploring all available options to manage debt, especially in unforeseen circumstances such as medical emergencies. The experts collectively advocate for negotiating payment plans that reflect the caller’s current financial hardship while maintaining a focus on future income prospects to ensure long-term financial stability.

Final Advice:

• Engage with Creditors: Don't avoid the debt; instead, communicate openly about your situation to potentially negotiate more manageable payment terms.
• Maintain Hope and Positivity: Believe in your ability to recover and manage the debt over time, leveraging future income opportunities.
• Seek Professional Guidance: Consider consulting financial advisors or utilizing resources like Y Refi for refinancing options tailored to delinquent private student loans and similar debts.

“A: I think you can pay that off... as soon as you can get healthy, yeah man, you're getting out the Midland and man you're a young Billy Bob Thornton out there.” [04:43]

This episode serves as a crucial resource for young individuals facing significant debt due to unforeseen circumstances, providing both empathy and practical strategies to navigate financial challenges.

Notable Quotes:

• A (Caller): “I'm $115,000 in medical debt as of right now, and I'm 19 years old.” [00:02]
• B: “I think you can.” [04:20]
• C: “...Is there some sort of payment plan I can work out that takes into account my hardship right now?” [04:13]

For more insights and daily doses of life and money advice, tune into The Ramsey Show Highlights, available seven days a week through the Ramsey Network.