‘Tell Them to Screw Themselves’: Ramsey to Nashville Woman Paying $900 a Month on a 275% Loan

“Louie the loan shark has gotten enough. I would just call them up and tell them to screw themselves. Stop paying. Eventually they’ll sue you, and then you settle.”

Dave Ramsey gave that answer on the October 7, 2026 episode of The Ramsey Show. The caller was Michelle from Nashville, who was stuck in a credit line charging 275% APR.

She had paid $900 a month for months. Her $3,000 balance was still growing about $20 a day.

Ramsey is telling a listener to default on a legal debt on purpose and wait for a lawsuit. Do it carelessly and you swap a bad loan for a court judgment. Do it with a plan and it is the cheapest way out.

Why $900 a Month Can’t Beat This Loan

My take: Ramsey is right on the math. At $20 a day, the charges add up to $7,300 a year on a $3,000 balance. That is more than twice what she borrowed. Her payments go to the lender’s charges, so the principal never moves.

For comparison, the average credit card APR at commercial banks was 21% in the Federal Reserve’s August 2026 reading. That is close to a record high, and her rate is still about 13 times higher. Next to her loan, an ordinary credit card looks cheap.

Tennessee allows loans like this. The state’s flex loan law lets lenders add a daily “customary fee” on top of interest. The Chattanooga Times Free Press wrote that this let lenders get around the state’s rate cap because the legislature “simply called the interest something else”. ProPublica has reported a flex loan charging 280%.

Earlier in the same episode, Ramsey told another caller, “What you put into it, your sunk cost, is skewing your judgment.” The months Michelle has already paid are gone. Every new payment just keeps her in the same place.

Know What Default Costs Before You Stop Paying

When Ramsey says the lender will eventually sue, believe him. ProPublica reported that one Tennessee flex lender has sued over 110,000 borrowers. If you ignore a lawsuit, the lender usually wins a default judgment and can then add court costs.

A judgment lets the lender collect from you directly. In Tennessee, consumer creditors can garnish up to 25% of your disposable earnings, which comes out of your paycheck before you ever see it. Lenders can also go after bank accounts. The default will also hurt your credit report for years. Garnishment limits and statutes of limitations differ from state to state, so look up the rules where you live before you miss a payment.

Settlement Cash Decides Whether Walking Away Works

The deciding factor is whether you have money ready when it’s time to settle. Lenders settle because they want cash now. If you default with nothing saved, you end up with a judgment. If you default with cash ready, you can negotiate.

Here is how that works for Michelle. If she sends her $900 payment to her own savings account each month, she will have the full balance in about 3.3 months. That is likely before any lawsuit reaches a courtroom. A lender holding a loan in default will often take less than the full balance in exchange for a single payment.

Ramsey offered a faster option first: come up with $3,000 within one month. Michelle makes $93,000 a year and has already paused her 401(k) contributions. Paying it off at once stops the daily charges right away, with no risk of going to court.

Steps to Take Before the Next Payment Hits

1. Calculate your annual cost. Find the daily charge on your statement and multiply it by 365. If the result is larger than your balance, regular payments will never pay off the loan.
2. Try a lump sum first. Give yourself 30 days. Sell something, pick up extra shifts, or put any freed-up paycheck money toward it. Paying in full is the only exit that avoids all legal risk.
3. If you can’t, protect your cash. Cancel the lender’s automatic debit authorization in writing, both with the lender and with your bank. Then move your usual payment into a separate savings account every month.
4. Answer any lawsuit. Go to court and offer a lump-sum settlement. Get the agreement in writing, stating that the debt is settled in full, before you send any money.
5. File a complaint. Report the lender to the Consumer Financial Protection Bureau, which received more than 6.6 million complaints in 2025, and to your state’s financial regulator.

When a loan’s yearly charges are bigger than its balance, stopping payments can be the right move, but only if you save that money every month so you can settle.

Contact [email protected] for any questions or corrections.