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Questions tagged [debt]

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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Enterprise value in terms of market cap, debt and cash

The formula for EV is EV = MC + debt - cash It represents the cost to buy a firm right? Because you assume its debts and its cash will be yours. So, If MC = 100 billion, Debt= 0 Cash = 1000 billion EV=...
upstream's user avatar
  • 271
0 votes
2 answers
77 views

Price for a bond that was issued in the past?

I understand that for US treasury bonds, that the price, its current yield and annual coupon is related by price = coupon/yield. But the prices and yields when I look them up online are always denoted ...
Mikkel Rev's user avatar
1 vote
1 answer
217 views

Which Debt shall I pay first?

I have 2 debts the first is my mortgage ($600,000) on 3.3% interest rate and the other is my study loan ($60,000) on 7.0% interest rate I made savings of $30,000 I want to use to pay my debts Which ...
asmgx's user avatar
  • 123
3 votes
1 answer
442 views

Explaining equity being analogous to a call option and bonds being equivalent to a short put

I read this: Equity in a corporation is essentially a call option on the enterprise value (the sum of all the firm’s assets) with a strike price equal to the firm’s debt. The firm’s bonds are a risk-...
MegaZeroX's user avatar
  • 143
0 votes
2 answers
73 views

What is the probability of each tier of creditor/equity claims being made whole?

In bankruptcy, the broad "tiers" for debt settlement are: Secured debt (going in order of first lien to second lien and so on) Priority unsecured debt General unsecured debt Preferred ...
MegaZeroX's user avatar
  • 143
1 vote
2 answers
302 views

How can I rent cloud computing services without risking getting into a high debt?

I rent cloud-computing services from a large and reputable company. Each year, I charge $500 into my account, and use the money to buy droplets, which cost between $5 and $20 per month (depending on ...
Erel Segal-Halevi's user avatar
14 votes
11 answers
4k views

Does the debt snowball outperform avalanche if you put the freed cash flow towards debt?

There are two main algorithms for paying off debt; The snowball, where you put your extra money towards the smallest debt to knock them off the board faster The avalanche, where you put the extra ...
HAEM's user avatar
  • 1,556
3 votes
1 answer
948 views

Is it possible to make additional principal payments for IRS's payment plan installment agreement?

I am looking at this page on IRS website https://www.irs.gov/payments/payment-plans-installment-agreements and I don't see any information about whether I can make additional principal payments to pay ...
Vanity Slug - codidact.com's user avatar
10 votes
2 answers
3k views

Should I consider tax deductions for interest when choosing a loan to pay off?

My situation is that I'm receiving a one time lump sum. I have two debts to pay off. Debt A, interest rate 3.5%, smaller installments Debt B, interest rate 4.5%, bigger installments From this, the ...
HAEM's user avatar
  • 1,556
0 votes
0 answers
158 views

I have not paid my bill to Ability GmbH due to medical tragedy and moved to India what happens

It will be helpful if I find answer for this. I was working in Germany and there I registered in some dating site which I forgot after I moved to India due to my medical tragedy and now I am in ...
Aravind M's user avatar
1 vote
1 answer
81 views

What is the easiest and cheapest way to invest to HY corp bonds?

I would like to invest in high yield US debt. Picking companies with that rating sounds very involved and I don't have the knowledge for it. Do I buy index or ETF instead? Or what is the easiest and ...
Medan's user avatar
  • 553
4 votes
0 answers
93 views

Consequences of small bank debt in EU as citizen of another country

I have a bank account in France that I created when I lived there about 10-8 years ago. A year ago this account started charging a monthly fee that didn't exist before, and then I started trying to ...
gsmafra's user avatar
  • 141
1 vote
1 answer
111 views

If i pay a creditor directly can a collector still sue for fees?

We paid a creditor the full amount that was owed plus interest. The collector is charging $9000 on a $13000 debt. We feel this is exorbitant. Can we still be sued by the collector?
D scott's user avatar
  • 11
4 votes
3 answers
337 views

Musk bought Twitter with $13b loans - why is *Twitter* liable for this debt rather than Musk?

Elon Musk bought Twitter in late 2022 for $44 billion. My understanding is that $13b of the total price was financed by bank loans. So, why is Twitter itself on the hook for the loan repayments? If I ...
Paul Y's user avatar
  • 149
3 votes
0 answers
136 views

What is the worst that can happen if one does not file for bankruptcy but cannot pay their debt either (in Canada)?

In a situation when one does not file for bankruptcy, yet does not pay their debts, collectors start calling and mailing, then the creditors may file a lawsuit. But if one doesn't have any property or ...
sequence's user avatar
  • 227
0 votes
1 answer
129 views

Indebted to managed investing service by entry error

Hello recently according to a promotional offer, I decided to put some money into a Wealthsimple managed investing account. However when specifying how much, I accidentally entered too many zeros. ...
Tom's user avatar
  • 13
-3 votes
2 answers
289 views

How could the earnings come from debt, what does the author mean here?

I'm reading The Intelligent Investor and quote: In sum it appears that a significant part of the 11% being earned on corporate equities as a whole is accomplished by the use of a large amount of new ...
daisy's user avatar
  • 579
0 votes
3 answers
294 views

If informal debt agreements ( e.g. IOUs ) aren't legally enforcable, how are they useful? When should you use a loan agreement instead?

I am unsure when to use IOUs for my business & friends' debt. Investopedia states that loan agreements are similar to IOUs but legally enforceable. If informal debt agreements carry no legal ...
Michael Szer's user avatar
2 votes
1 answer
440 views

Warren Buffett about a company's long term debt

In the book Warren Buffett and the interpretation of the financial statements, Mary Buffett explained companies that have enough earning power to be able to pay off their long-term debt in three or ...
J.Doe's user avatar
  • 113
0 votes
1 answer
102 views

Long Term Debt Due

I would like to see the Long Term Debt Due, but it seems it is not displayed. The image above shows the current and long-term liabilities of META. Is this expense included in one of the categories in ...
J.Doe's user avatar
  • 41
9 votes
5 answers
2k views

Prior to the student loan repayment changes -- when could an individual wind up being charged more in interest than their minimum payments?

When I had student loans I was able to make minimum payments on mygreatlakes (the website I was directed to go to after graduating). I have some recollection about these being special loans with extra ...
Sidney's user avatar
  • 468
1 vote
1 answer
216 views

Can a bank take money out of my account without asking, to collect old outdated debt?

Almost 2 decades ago I had identity theft and they maxed out my card. I lived with it (and terrible credit) and could not discharge it or pay it off. Some years ago this all fell off my record and is ...
user7211's user avatar
7 votes
3 answers
4k views

Is it a good time or good idea to invest money that I will need to repay in a year time that is not currently accumulating interest?

I'm currently in my graduate studies in Canada. I have around 20k in savings. I will make around 8k more by the end of studies in savings without accumulating any more debt. I currently have 20k in ...
akozi's user avatar
  • 243
5 votes
1 answer
4k views

Can I see how a company is using its debt?

How can I understand the way that way a company is using its borrowed funds? From the balance sheet I can see how much debt the company issued, and how much is paid back. But how can I see if the debt ...
DevLeo's user avatar
  • 75
0 votes
1 answer
40 views

Difference between secured debt and security interests

I am trying to better understand the difference or similarity among the following terms: Secured/Unsecured Debt Security Interests For example, when I hear the term secured debt, I immediately think ...
Frank Swanton's user avatar
1 vote
3 answers
107 views

The cost of capital Equity versus Debt

Trying to understand something basic about cost of capital that I can't seem to wrap my head around. When we talking about issuing debt to raise funds for a project, the cost of capital is the ...
Paolo Menuez's user avatar
-3 votes
1 answer
306 views

What are the implications of owing more money than is currently in circulation?

I recently found this reddit post in which a user found a bug in a software that did not set a limit on a margin call (my knowledge of what a margin call is is really shaky so I might mess up words), ...
violetorigin's user avatar
-1 votes
2 answers
270 views

What will happen to a tiny debt if I ignore it?

I received a medical bill of $150.00 and I made a payment of $149.99 (just as an experiment) so technically I own the clinic $0.01. I am curious what will happen to this tiny debt. It will cost them ...
Zuriel's user avatar
  • 1,571
0 votes
1 answer
65 views

Should I hold strong currency with weaker interest rate or a weaker currency with high interest rate?

I earn in USD but my home country has a different currency INR. Pros of holding USD: Converting to INR cost me 0.5% of the amount which I save by not converting. USD/INR rate seems to be going up ...
CodePanda's user avatar
  • 103
3 votes
1 answer
238 views

Can debt collections show up on my credit report if the collectors haven't contacted me first?

Can debt collectors report to credit bureaus when they haven't contacted me yet?
JobHunter69's user avatar
2 votes
3 answers
260 views

Can I leave money to my child to bypass partner's student loan debt

My domestic partner and I have a young child (3-5 years old). We are both the legal parents. My domestic partner also has quite a bit of student loan debt (80K+) that is managed on a 20 year income ...
TsSkTo's user avatar
  • 347
0 votes
1 answer
96 views

How can one debt-finance a corporate takeover and then transfer debt to the company? [closed]

I'm reading about the Glazer family's takover of soccer club Manchester United nearly two decades ago. They apparently debt-financed their takeover, borrowing hundreds of millions of pounds, and some ...
Allure's user avatar
  • 2,716
6 votes
2 answers
2k views

How to write down each month borrowing over past month

Since Pandemic I had lost my job and borrowed money or money sent by my parents from saving but I couldn't write it down as I am financially illiterate/bad with maths. Now and in past, it has caused ...
localhost's user avatar
  • 595
10 votes
2 answers
847 views

What do I do after requesting and receiving a debt validation letter for a medical debt I don't recognize?

I received a debt collection call a few months ago from a professional debt collector for a debt I didn't recognize, followed by a written notice. I wrote back that I dispute the debt and requested ...
Robert's user avatar
  • 499
0 votes
2 answers
141 views

How to tackle Student Loan debt before and after marriage

My partner and I are trying our best to plan for the future and figure out how we will manage our finances in the coming years. They are currently about to begin their graduate studies for their field ...
Flats's user avatar
  • 729
29 votes
6 answers
5k views

How can I know if a debt collector is holding onto a debt?

Some time ago, I was contacted by a debt collector. A prior landlord had claimed I had owed them six months of rent. The landlord sold the debt to a debt collector, who then silently held onto the ...
Village's user avatar
  • 2,813
28 votes
2 answers
9k views

Taking college classes to avoid student loan payments indefinitely

My sister-in-law has decided she wants to take part time college classes so she doesn't have to make payments on her private student loan and her plan is to do this until she dies. She graduated from ...
Erica Grant's user avatar
3 votes
2 answers
249 views

Why would rising interest rates favor the company with more long-term debt?

I was reading about the debt to equity ratio on Investopedia and in third paragraph under the "Modifications to the Debt-to-Equity (D/E) Ratio" title, it says that: "If interest rates ...
CountDOOKU's user avatar
7 votes
3 answers
422 views

Debt options for single mom starting over

Hello fellow community members. I have a question regarding debt, and since it is a shameful subject with a lot of stigma I have been reluctant to ask for advice. Currently I am a single mama to a ...
rosie avra 's user avatar
1 vote
3 answers
352 views

Who’s losing money when debt becomes easier to payoff thanks to inflation?

The Consumer Price Index in the US in May jumped up by 0.6%. Overall it’s possible that prices on goods (aka inflation) will increase by 10% in 2021. Now, assuming that salaries follow trend as well ...
JonathanReez's user avatar
  • 5,862
36 votes
11 answers
7k views

Bill payee can't find my payment and threatens debt recovery action

TL/DR Bill payee can't find my bank transfer and threatens debt recovery action. What to do? A family member is studying at a major UK university. Quarterly or so, the university raises tuition bills. ...
Bennet's user avatar
  • 489
1 vote
0 answers
44 views

What expense account is recommended for prepaid expenses where services were never received? [closed]

Our small business prepaid a contracting agency (software development) to complete some work for us. We booked the A/P accrual against the assets prepaid expenses account, since that's what we would ...
user109983's user avatar
0 votes
2 answers
84 views

When calculating the debt-to-equity ratio of a company, what is shareholder equity?

If the debt-to-equity ratio of a company is calculated by dividing the liabilities of a company by the shareholder equity of the company, does this mean you would divide $10,000 (if a company has this ...
Bradley's user avatar
  • 65
1 vote
2 answers
108 views

How are borrowings in local currency used to hedge foreign exchange exposure on investments?

The following appears in Jardine Matheson's 2020 annual report's Financial Review section: Treasury Policy The Group manages its exposure to financial risk using a variety of techniques and ...
Flux's user avatar
  • 17.1k
1 vote
3 answers
409 views

Who is buying all the debt?

Please bear with my limited knowledge of monetary systems. I've got degrees in Comp Sci and Math, and i work as an ml engineer, so I'm pretty used to numbers. But, i simply can't wrap my mind around ...
Alan's user avatar
  • 19
0 votes
1 answer
82 views

Is using debt into a regular mutual fund different from investing in a leveraged mutual fund?

I was thinking if I should invest in some mutual funds using low-interest rate debt. But then I read this Q&A: Why are daily rebalanced inverse/leveraged ETFs bad for long term investing? If I ...
user2652379's user avatar
1 vote
2 answers
209 views

Business paying back debt to individuals

I have a single member LLC (Missouri, United States) that I started a few years ago. We received approximately $20,000 in funding from family and friends, of which I did not fully understand the ...
bunkerguy's user avatar
  • 111
4 votes
2 answers
203 views

Handling rent debt in California

Due to the pandemic, I was unable to pay rent for my apartment complex that I have now moved out of. I do not have the money to pay this debt because I was unemployed because of the pandemic. ...
Fay's user avatar
  • 41
13 votes
8 answers
5k views

How badly will my credit score be affected if I don't pay back a small margin debt?

I recently started trading stocks and was trading on ameritrade. I went in with just a little money to play around with and try and learn about it, but I forgot to turn off margin trading apparently. ...
Chris's user avatar
  • 131
0 votes
1 answer
88 views

Is a bunch of debt now better than distributed debt in the future in terms of paying less in the long run?

This might be too theoretical but it popped into my head this concept for attending University/College. If you had the ability to choose one of the following which is best in terms of you paying ...
guanciale's user avatar

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