Jul 18, 2025
Mary from San Bernardino, California, is one month into following financial advice from The Ramsey Show, and although she’s already completed step one of Dave Ramsey’s baby steps, she finds herself facing pressure due to her debt.
She shared with hosts Jade Warshaw and Ken Coleman that she has $9,000 in collections and $10,000 in active student loan debt, and recently got a call from a debt collector demanding payment on a $6,000 balance and threatening legal action.
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Instead of panicking, Mary used a line she heard on the show: “My financial advisor told me I might file bankruptcy, so if I do, you’ll get the call. Remove me off your call list.” Then she hung up.
The call left her rattled. She wasn’t sure if she’d gone too far or just stood her ground. So she called into The Ramsey Show for help. Here’s what the hosts had to say, and what they told her to do next.
How Mary handled the threat, and what the hosts think
Co-hosts Jade Warshaw and Ken Coleman applauded her efforts.
“What you essentially told them is I don’t have the money that you’re asking for and I’m broke. And so, if you think you’re going to get that money from me, you’re wrong,” said Warshaw.
Warshaw expanded, “Credit card companies do sometimes sue you. But it takes a long time to get to that step.”
After confirming that she did the right thing, the hosts offered to coach her through their next steps.
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Moving beyond the threat
Mary shared that she now has a $261 monthly surplus after sticking to her budget. The hosts recommended she use that surplus to work the debt snowball plan, which involves paying off her smallest debt first and working her way up from there.
Mary mentioned that she’d sent a money order of around $450 to pay down her debt in collections, but Warshaw advised against continuing that plan.
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Instead, Warshaw suggested that Mary pause those payments and save up around $5,000 to offer a lump-sum settlement on the $6,000 debt in collections. This approach could help her clear the balance for less than she owes.
“That is what you do with debt in collection, you settle it,” said Warshaw.
Beyond that, Mary is already taking proactive steps to grow her income. She recently launched a nutrition and meal prep business, earning $2,040 per month — with plans to expand.
Warshaw left her with these encouraging words: “You’re capable of far more than you ever thought possible.”
For others in a similar position, the path forward includes more than just budgeting. The hosts recommend focusing on a few key steps:
- Stick with the debt snowball method
- Pause payments on collections and negotiate a lump-sum settlement
- Freeze any new credit card use
- Grow income through side work or entrepreneurship
- Build a 3- to 6-month emergency fund after debts are repaid
By staying focused and strategic, Mary, and others like her, can dig out of debt for good.
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Sarah Sharkey is a personal finance writer who enjoys helping people make optimal financial decisions for their situation. She loves digging into the nitty-gritty details of financial products and money management strategies to root out the good, the bad, and the ugly. Her goal is to help readers find the best course of action for their needs.
