News from the Tennessee Valley Columnists

Dave Ramsey

How long do I owe money from client's overpayment?

Dear Dave: I used to do business with a major city. Every now and then they would overpay me or underpay me. This went on for about a year and a half and Iíve since stopped doing business with the city. In fact, Iíve stopped doing business altogether. Is there a time limit on settling the account with them? I once wrote them a check for an overpayment, and a year later they still have not cashed it. — Nathan

Dear Nathan: The first thing Iíd do is notify the city that if they donít cash the check very soon itís probably not going to be any good because youíre going to close the account. Let them know if they need another check — if theyíve lost the original Ė thatís fine, but you need those people to get their act together!

You wrote them a check because you owed them money. Itís aggravating that they havenít cashed the check in a year, but if you close the account make sure you still have the money available. Morally, you should pay. Could they come back at you for the money later? Sure. After all, you owe the amount. Whether or not thereís a statute of limitations or time limit on the debt depends on the state in which the transactions occurred.

You need to consult an attorney, but my guess is the check isnít big enough to warrant going to war over. Try to force their hand by asking them to cash it by a specific time, otherwise youíre going to close the account. — Dave

Sell home after layoff?

Dear Dave: My husband was laid off a month ago from an executive job making $80,000 a year. We've got no debt except our house. We owe $82,000 on it, but it's worth about $300,000. We've also got a $30,000 emergency fund in place, and I work part-time making $2,000 a month. It's difficult to find positions comparable to what he did for a living, and it doesn't help that he's older than 50. He's even tried getting lower level jobs, but no one wants to hire him for those because they know he'll take a better job if one comes open. Do you think we should sell our house? We've also got a boat worth about $18,000 we could sell. — Sheila

Dear Sheila: I'd get rid of a boat long before I sold my house. Boats are luxury items, and selling them isn't nearly as traumatic as having to give up your home. You've got a nice, fat emergency fund sitting there, but I'd rather see your husband find some kind of work in the meantime. It may not be the position or money he's used to, but there are responsibilities to be considered here. I know delivering pizza isn't an $80,000-a-year glamour job, but the cash will help a lot. You can dip into your emergency fund a little bit, and you may have to before it's all over. But I'd love to see him doing this and you guys living on a really tight budget! Understand, too, Sheila, that he's going through an emotional and psychological crisis after losing a big job like that. Encourage and support him all you can.

As long as he's being diligent seeking a new job and you're doing the right things like budgeting and watching what you spend, then you should keep the house. Take a deep breath, and hug each other a lot. Chances are, everything will work out just fine! — Dave

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