Dave Ramsey is just about the most successful “financial self-help” personality in America today. He has a radio show, appears regularly on television, and is the name on a program used nationwide (especially in churches) to help people reduce or eliminate their debt. When people think of reducing their mountain of debt, Dave Ramsey’s “debt snowball” is one of the first things that pops up in conversation (or on the google).
I will admit, much of his advice is sound. His plan for tackling debts wisely leverages human nature in its structure, and if you can follow the plan, it will work for getting you out of debt. But, like with any program, it has its limits, and you need to understand those limits before choosing his plan over any other.
As a bankruptcy attorney, I get a little offended by Dave Ramsey’s incessant vilification of bankruptcy. He paints bankruptcy as a great, terrible evil that should never be used unless it is literally the only choice left to a person. What he doesn’t regularly mention is that he filed bankruptcy in the 1980s, and the relief it gave him allowed him to set up his great success he finds today.
Dave is also trying to sell you something when he gives you advice on the radio or TV. You could buy his books, enroll in his debt payment program, or listen to his show tomorrow, brought to you by various sponsors. His advice, especially the anti-bankruptcy stance, comes colored with that sales pitch. You should be aware of it, and shade your responses accordingly.
My job as attorney is different than Dave’s job (it also doesn’t pay as well). I am required by my oath as a lawyer to give you advice that will serve your best interests, not mine. I am bound to tell you of other options, and how those may compare to filing a bankruptcy, or doing nothing at all. And honestly, I like it that way. I help give you information, and you get to make informed decisions. It’s the way things should work.
I give the following advice to almost all of my clients: “Make a plan, and try to execute that plan. The worst case is that your plan doesn’t work. Then you can make a new one.” So often, people come to be overwhelmed by the situations they find themselves in, and not knowing what to do. Their initial response is to either do nothing, or run around like a headless chicken. My job is to help outline the options, their consequences and benefits, and give my clients the basis to move forward, confident in what they are doing. That may include a bankruptcy, but it often doesn’t.
So in short, if you find Dave Ramsey’s advice on paying down debt beneficial to you, I think that is grand. But if it doesn’t feel like it fits, talk to someone who has your interests in mind, not the expansion of empire.