Financial expert Dave Ramsey used a caller's debt dilemma to issue a broader warning about co-signing loans and what he describes as a profit-driven lending system that preys on families.
Caller's $32,000 Debt Question Sparks Ramsey's Warning
On the Monday episode of "The Ramsey Show," a caller named Jessica from Illinois asked whether she should include her 22-year-old daughter's $12,000 co-signed car loan in her debt snowball while juggling $20,000 in credit-card debt.
Ramsey instructed her to pay off her credit cards first, then eliminate the car loan because she remains fully liable for it.
"It’s what we call a contingent liability… and they're going to come after you really fast," he said.
Ramsey Warns Co-Signing Is ‘Biblically Stupid’
Ramsey warned that co-signing is a financial trap disguised as help.
"Don’t act like that, you’re doing somebody a favor by helping them buy something they can’t afford," he said.
Ramsey called the decision "biblically stupid," arguing that Scripture itself warns against co-signing because it traps people in debt they never intended to carry.
Citing Proverbs, he added, "One lacking in sense cosigns for another."
He argued that lenders' refusal to finance Jessica's daughter independently was a clear signal.
“If this is the most aggressively marketed product and if they want to sell debt more than they want to live and eat and breathe and they won’t loan your daughter money, something’s really wrong.”
Ramsey Says Debt Decisions Are ‘Math Problems,’ Not Moral Failures
Two callers to "The Ramsey Show" illustrated the financial pressure on young Americans.
In one call, a 27-year-old Texas man sought help managing $100,000 in debt while living on his wife's $60,000 income.
Ramsey told him their $27,000 car loan didn't fit their budget and advised selling the vehicle, warning that the family was creating stress by trying to maintain a lifestyle they couldn't afford.
In another call, Ramsey told a 27-year-old named Toby, who had $14,000 in debt and had been homeless for months, that bankruptcy wouldn't fix his deeper challenges.
Toby described losing housing, unemployment and DUI-related costs that pushed him into instability.
Ramsey said the debt was only a symptom, urging him to find steady work, stay sober and build a support network to regain stability.
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