The debt tag refers to all situations where money is owed to another party, often a bank or other financial institutions. This tag covers how to get out of debt, how much debt to carry, and other borrowing related questions.

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11
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5answers
4k views

If a debt collector offers to settle for substantially less than the owed amount, should the offer be accepted?

Someone I know has had an outstanding debt (almost $10,000) for a number of years. He recently got a letter from a debt collector saying that if he pays about $2,000 by the end of the month, the debt ...
3
votes
1answer
394 views

Can I borrow against my IRA to pay off debt or pay for a car?

I am going to need a new car soon and I was curious if I can borrow against my IRA to pay for the majority of the car so I don't have to finance much. Also, can I borrow against my IRA to pay off ...
15
votes
10answers
3k views

Snowball debt or pay off a large amount?

I recently received a large amount of money, well large in my eyes, around 5000 dollars. I have the following cards: $10619 citi card ($234.35/month) $2500 Best Buy Card - deferred interest ...
13
votes
2answers
3k views

Does the United States really owe 114 trillion dollars? Please explain “unfunded liability”?

I would like to refer to the site USdebt.Kleptocracy.us (A visualization of United States debt) I'm just a little bit curious as to what these figures mean. I understand the 1 trillion dollar ...
4
votes
1answer
150 views

Should I save for my children's university education in Canada, or am I better off paying off loans and gaining debt room?

Looking at the financial aid system in Canada, it seems that significantly more aid is available for those who do not have savings or lack the ability to directly pay for their education. As a member ...
6
votes
2answers
12k views

If you receive life insurance, does the estate have any claim to it? Do you have to use it to pay for debts of the estate?

If after someone dies, you receive life insurance as the beneficiary, is the estate entitled to any of that money? Are there cases where the life insurance money can be included in the estate and ...
9
votes
4answers
3k views

How can all these countries owe so much money? Why & where did they borrow it from?

When I look at this long list of countries with debt, I get the feeling we've all been sold a load of manure. How can so many countries owe so much money? Generally speaking, why did they borrow it, ...
3
votes
4answers
116 views

What are some options for getting loans with lower interest rates

Like many other folks nowadays, I'm trying to lower my debtload, and one of the ways would be to reduce the interest that I'm paying on my debt (currently around 9/10%). I've tried the debt ...
10
votes
2answers
621 views

Can a company have a credit rating better than that of the country where it is located?

Inspired by this question. In one personal finance book I read that if a company is located in a country with credit rating X it can't have credit rating better (lower - i.e. further from AAA level) ...
4
votes
1answer
129 views

Will U.S. downgrade actually help large, financially sound corporations?

From everything I read, the U.S. debt downgrade is expected to drive up borrowing costs all across the board. But I have a theory that it will actually lower the borrowing costs of large, financially ...
9
votes
3answers
312 views

Does getting more credit or credit cards improve your credit score?

I'm reading Ramit Sethi's I Will Teach You To Be Rich, and one of the tips from the first chapter is to apply for more credit card debt. He warns it's only for people like me who carry no credit card ...
3
votes
3answers
106 views

Where do I get the best interest rates on a loan?

What do you think about Peerform, Lending Club, and Prosper in relation to these other Banks, credit unions, etc.? I am looking for a debt consolidation loan and I have a decent FICO ~700.
6
votes
2answers
223 views

How could the 14th amendment relate to the US gov't debt ceiling crisis?

I saw a reference to the 14th amendment in the news today. What could that have to do with the US debt ceiling crisis? Could somebody explain please.
6
votes
1answer
91 views

Can creditors force sale of shares to pay debt?

Can creditors force us to sell our shares in order to pay or reduce debts owed or perhaps put a court order in place in order that we use any income from them to reduce any debt? (We are in the ...
4
votes
6answers
6k views

Is it better to spread debt out on multiple credit cards or consolidate it to just a few?

Is it better to spread out my credit card debt so that each of my cards is at around 30% of my limit or is it better to consolidate it all to just one or two cards even if these end up being at close ...
4
votes
3answers
287 views

How could USA defaulting on its public debt influence the stock/bond market?

Ok, let's face it... US public debt is high and people are starting to wonder if the country might default on its debts. How would this hit United States' stock market, its bonds, or its currency? ...
5
votes
4answers
349 views

What happens to consumer debt if a country defaults on its debt?

What happens to consumer debt if a country defaults on its debt? Also, how will a debt default by a country affect government-backed loans such as mortgages and student loans?
10
votes
7answers
735 views

What should I do with my $10K windfall, given these options?

Let's say you get a $10k windfall. How do you determine what is the best thing to spend it on? We need a new roof. Our mortgage is moderately underwater but not in bad shape and we are content where ...
2
votes
3answers
482 views

Does total debt include all kinds of debt?

When it is said that the average American has x thousand dollars in debt....does the x thousand consist of everything: mortgage, student loan, line of credit, credit card overdue payments etc.? Or are ...
13
votes
6answers
6k views

Can it really hurt your credit to pay off things in collections?

I have 4 items in collections according to my credit reports - 2 medical bills totaling $1700, and unpaid traffic ticket for $200, and an old utility bill for $185. I have one credit card that I've ...
7
votes
1answer
1k views

Borrowed money from a friend for my business, & can't pay it back. Got a lawyer's letter. What can happen?

I borrowed some money from a friend of mine for use in my business and I am not able to pay back to him now due to the bad business. Actually, he put the money into my business first and later decided ...
9
votes
2answers
473 views

Can I refinance my student loans?

I have student loans from graduate school with an interest rate of 6.625%. I see that interest rates are quite low. (Mortgage rates are at 4.6% for a 30 yr fixed.) So I am wondering: Is it possible to ...
12
votes
8answers
1k views

At what interest rate should debt be used as a tool?

I know people love to preach the merits of being 100% debt-free, but when used intelligently, debt can be a powerful tool. All else equal, if I have debt at an interest rate of say 1% and have an ...
4
votes
3answers
183 views

How to handle old 401(k) I have, with respect to refinancing some of my debts?

I have recently been shopping around to see if I could get my home refinanced. I purchased in Oct. 2007 for $200,000 - 30 year fixed at 5.99%. I called my lender and they were willing to refinance at ...
3
votes
1answer
256 views

What is the difference between a home equity line of credit and a mortgage?

In the article About.com - Six Ways To Prepare Now For Rising Interest Rates it states: The average US household debt, according to the Fed, is $20,000, not including mortgages. Most of that ...
34
votes
7answers
3k views

Why use credit when you have the cash?

I've heard several people state that they get loans even when they have the money to cover the cost in the bank, and it befuddles me why they would pay interest instead of using their own money. This ...
13
votes
6answers
9k views

If a country can just print money, is global debt between countries real? [closed]

I was having a conversation with my brother last night and we were trying to figure out how exactly countries go into debt to each other. Say the US borrows money from China. What does this mean? Do ...
3
votes
2answers
13k views

What is the difference between a bond and a debenture?

What's the difference between a bond and a debenture? Are they simply different words used to mean the same thing? (e.g. debenture sounds more business-like than bond).
27
votes
10answers
2k views

How do I explain why debt on debt is bad to my brother?

My brother has about 5 loans that he paying back and he thinks that another 5000 loan will "solve his problem". He has been this way since he was young, he's now in his 30's. I'm trying to find a ...
14
votes
3answers
986 views

Need advice about my financial situation

Here is my living situation in a nutshell Live in California 2 kids (7 and 11) Ex-wife I am almost 40. I rent Financial situation: Make about $170k (includes regular job + moonlighting) before ...
4
votes
4answers
2k views

Possible to use balance transfers to avoid interest with major credit cards?

I recently paid off a balance transfer and then this thought occurred to me. Let's say you have $3000 of debt outstanding on a credit card. The goal is not to pay interest while you work to save the ...
1
vote
3answers
370 views

What implications does having the highest household debt to disposable income ratio have on Australia?

I hear that Australia has the highest household debt to disposable income ratio in the world. What does that mean? What implication does that have for the economy, for the stock market and for the ...
1
vote
1answer
186 views

How to take advantage of record high household debt in Canada?

The Canadian household debt/disposable income ratio is currently (December, 2010) at a record of 1.48. Reference: The Globe and Mail - Household debt ratio hits record. What are some investment ...
13
votes
3answers
1k views

The U.S. National Debt: What is it, where did it come from, and how does it work?

I am not from USA. I read few articles about the US National debt but still can't get the sense of it. Could you explain it in simple words? I know that it is huge. I can't understand following ...
5
votes
2answers
224 views

Any US Gov program for under water mortgages when still making payments?

I am trying to help out one of my friends that is in a financial bind. Several years ago he purchased a house because he could build up more value then if he kept renting. At the time it looked like ...
10
votes
3answers
2k views

Why can't a US state default, but a EU state can?

I'm new here so I'm not sure if this type of question is appropriate on this site. I live in the EU (Italy) and I'm quite concerned (probably not the only one now in EU) about the possibility of some ...
5
votes
2answers
158 views

Under which conditions does it make sense for a Canadian investor to put their mortgage in their RRSP?

Canada allows investors to use their retirement fundings (RRSPs) as part of a loan to themselves, which can fund the buying of a house. When does it make sense to take advantage of this?
7
votes
5answers
316 views

File bankruptcy, consolidate, or other options?

So, during the economic downturn, my parents' business was seriously struggling (as in not making enough income to cover its own expenses) and my parents made a few bad decisions while trying to save ...
11
votes
6answers
6k views

Should I sell my stocks to reduce my debt?

The question is obvious. I have debt, not in excess, but I have. And I have some stocks in the market. Should I use the stock money to pay my debt, and be debt free. The debt is not high interest. ...
9
votes
7answers
6k views

What to do with an expensive, upside-down car loan?

Unfortunately, my wife had a car before we got married. She got the car a year or so before we met and now we still have the car. Her mother offered to pay for the car (my wife was still a student at ...
5
votes
2answers
134 views

What debts are both partners liable for in a 'community property' state?

I've just come across this article over on the mintlife blog and noticed that I do live in one of the ten community property states. I'm not overly familiar with this particular concept (keep in mind ...
8
votes
4answers
448 views

What is 'consolidating' debt and why do people do it?

I've seen 'debt consolidation' advised for people who have a lot of debt (from different credit cards, etc). What does that involve, exactly, and why is it a good idea? Say I have: -$1000 at 5% from ...
5
votes
5answers
254 views

What to do when institutions stopped lending you money?

I know the question seems confusing, but this is a real life event. My friend lived beyond his means for a few years, combined with half year of unemployment his Credit Card Debt went to the roof. ...
6
votes
5answers
610 views

Is it worth paying off my loan early with only 4 payments left?

I only have 4 payments left on my loan and have recently sold an asset so now have enough cash to pay the remaining balance. Is there any benefit to paying off the loan fully or as I've only got a ...
9
votes
7answers
732 views

Will be debt Free in 3 years — What order should i pay off my cards?

I have budgeted to the point where i can close all credit cards i have in close to three years from now. My question is, should I simply pay 1/3 to each card (will be over minimum payment on all) OR ...
142
votes
16answers
13k views

How smart is it to really be 100% debt free?

For the last 2 years, I have been trying hard to be debt free without affecting my personal cash flow. I am by no means a rich person, but I have a decent salary. I still have debt, specifically ...
26
votes
6answers
24k views

Where do countries / national governments borrow money from? [closed]

It seems that every country on Earth is in debt, but nowhere on the news do they ever mention to who. If countries are all in debt to each other then why not just cancel all the countries debt. If ...
5
votes
4answers
138 views

Is debt almost always the cause of crashes and recessions?

It seems every great crash, the underlying fundamentals always point to an ever increasing debt until it becomes unsustainable and bursts. How true would you say is that statement above?
2
votes
2answers
198 views

How to do Credit Card debt consolidation or get rates lowered?

I have a friend that has five credit cards of debt. A couple of the cards have high interest rates (20-25%). The rest are 15% and below. The total debt combined of all five cards is ~$10k. How ...
5
votes
2answers
89 views

Putting debt out long when interest rates are low?

This is something I heard once from a caller on a financial radio program. What does it mean and what is the logic behind this statement?