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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.

64
votes
9answers
19k views

How is early-and-often home buying as “get rich” advice feasible?

I am being told by this guy that the following is a guaranteed-to-work way to become rich and retire early. He says to start early. 20 years, or near that age. Buy 1 house a year. Rent it out. Start ...
5
votes
1answer
183 views

Settle credit card debt now or wait

Several years ago, I had 3 credit cards. After having financial issues (job loss and several other unfortunate events), I was not able to keep up with the monthly payments. I stopped payments on all ...
2
votes
2answers
1k views

Withdrawal from Roth IRA?

I am thinking of withdrawing all of my money from my Roth IRA as of now. I currently only have a balance of $2536 and have only $283 in investment returns. I know, how there will be some taxes ...
0
votes
1answer
84 views

Transferring personal debt from startup costs and operations to a corporation

For a long time, I've been a one person startup, and have just bundled all business costs - presenting at conferences/travel, office rent, hardware equipment purchases, etc., to my personal account. ...
0
votes
0answers
17 views

Do CDO tranches have different maturities?

While doing a bit of research on CDO's online I stumbled upon something that I cant quite clear up. For a sequential pay CDO with a reinvestment period are all the tranches paid down (assuming no ...
0
votes
1answer
62 views

Why do CDO's have a reinvestment period?

If CDO's collect all the cashflows from their underlying assets and then pay them out to the CDO investors whats the need for a reinvestment period? and where is the principal that is being reinvested ...
1
vote
5answers
440 views

Should I use 3k on my vehicle loan to get out of debt?

I currently am in debt with a vehicle loan about 18,900$ and with 12k student loan debt. I currently have 3300$ that I have in my savings account not being used at all. I currently have a 1k emergency ...
1
vote
1answer
101 views

How to mark an invoice as bad debt to show as business expense

I have several invoices I've billed clients, and they have never paid. How would I label or categorize the invoice, so that it shows as a business "bad debt", and thus go as an expense on my P&L ...
106
votes
13answers
24k views

Should I take out a loan to pay off a relative's credit card debt?

Recently a close relative revealed to me that she has run up $40,000 in credit card debt over the last few years, which she can no longer manage because the interest payments are eating up all of her ...
3
votes
1answer
238 views

How to handle surprise debt mostly comprising bank charges

I left the UK back in 2012 and had an open account with one of the high street banks. Two years ago (and unknown to me) this account was 60 pounds over-drawn (facility was for about 300 pounds). I ...
1
vote
2answers
101 views

Unexpected cash - pay off debts or buy home (to reduce child support expense)?

There are quite a few people who seem to handle personal budgeting questions, so I'll ask here, as my situation recently changed. I am a recently divorced father of 3, and was ordered to pay child ...
11
votes
3answers
672 views

Should I get out of debt fast using Dave Ramsey's Tactics?

I currently am $31,000 in debt from school and a personal loan and I am looking to pay it off. I just started a new job; I am 21 years old, fresh out of college. I am making around 50K USD. I have ...
0
votes
1answer
61 views

Easy ways to hedge against debt overleverage and potential inflation as a personal economic agent

Every prediction is correct... at some point in the future. However, there are economical indicators that would be considered teaching points if a financial crisis were to occur at any point in the ...
2
votes
1answer
230 views

I am a co-founder departing from a startup with debt, should I cover a portion of the debt on exit? [closed]

I'm a minority partner in an e-commerce startup, now departing due to personal reasons after being with the team for a couple of years. Founders agreement has a clearly outlined 4-year vesting ...
7
votes
5answers
3k views

Pay off car debt, or start (value) investing?

I am looking for a method to calculate - or estimate - whether it would be better to pay off car debt or start value investing in stocks. My history: We are soon to get about 1900 USD/month in ...
3
votes
6answers
402 views

In what order should I decrease my loan debt?

I currently have federal student loans, and a personal loan I took out for college. Below are my percentages for each. I am wondering which loans I should start paying off first to ultimately not ...
15
votes
3answers
636 views

How can I survive the economic crisis I see will hit Argentina soon?

I'm from Argentina, where the shit is about to hit the fan just like 2001. We are going to have a crisis similar to Greece in recent times (or us 17 years ago): all debt related. I'm not an economic ...
0
votes
1answer
36 views

how to calculate holding period returns of a bond if they coupon is reinvested?

I was reading a book about debt securities and bonds. There is a way given in the book that calculates HPR of the bond. If an investor purchases a bond at Rs. 104, earns Rs. 8 as coupon, which ...
1
vote
3answers
168 views

Which is better -to save money or pay down debt?

Generally speaking, if you've come into a little bit of money (for example, the profit from the sale of real estate), is it better to use that money to pad your savings account or pay down your debt ...
0
votes
2answers
205 views

Ramifications of not paying a credit card

Scenario - Credit Card bill has not been paid for about a year. (A small amount, about $1700.00) There's a debate in the family. One side says pay it all off now (money was received from the sale of ...
24
votes
6answers
6k views

Potential debt collection scam from National Credit Systems?

Yesterday I received a letter in the mail from an organization called National Credit Systems. In the letter, they say that I owe them $230 to the apartment manager that I rented from 3 years ago. I ...
0
votes
3answers
139 views

Should I Invest While Attending College?

Should I invest a portion of my summer job income this summer, or should I save it all to help pay for my Freshman year in college? I figure since I'm still living at home, it would be best to utilize ...
0
votes
0answers
16 views

Does the % of loss claimed on US taxes affect my liability on business debt

I have a partner in an LLC and this year I will take a larger portion of the business losses on my US tax return. We are 50/50 owners in the business and have a SBA loan. If I claim for example 70% ...
1
vote
3answers
231 views

Can bank take money from my account if my parent has debt in same bank?

As title says I am interested if bank can take my money from my account in case my parent has debt in that same bank (or in other words owes money to that same bank)? Most importantly, is this ...
0
votes
2answers
69 views

1099-C question

I did not work in 2017, and do not have any W2 forms for 2017. I am single, and I have been living on family support, I am currently trying to get disability. I received a 1099-C form in 2017 from a ...
0
votes
1answer
84 views

Newbie Question regarding Fiat Currency & the 'Promise to Pay' statement [closed]

I am a newbie and wanted to ask a quick question regarding statements that economists make, that is: "A currency is a promise to pay" "US will not be able to pay it's debt" So that I can ...
3
votes
0answers
96 views

Who to contact to understand my credit score?

When I was a kid, all the way until I was about 18, I was very ill. I would often have to go to the doctor or hospital and get treatments and scanned, etc. I have multiple debts that occurred when I ...
-4
votes
2answers
328 views

Can you abandon debt if you move address and open a new bank account? [closed]

This is a hypothetical situation. Let's say Bob, who lives in the UK, has a lot of debt to bank A, about £10,000 in credit card debt and another £10,000 or so in loans, overdrafts, and unpaid fees. ...
9
votes
5answers
1k views

HELOC vs Federal Student Loan

Given the following assumptions: Interest rates are the same for HELOCs as Federal Student Loans (they're both hovering around 5% right now). Loan amount could range anywhere between $10,000 and $40,...
5
votes
1answer
308 views

Can a jobless person get a home equity loan if he has other sources of income such as stock dividends?

Suppose a jobless person has a fully paid property. He wants to take out a home equity loan. Will the bank reject his loan application due to his lack of salary income as a jobless person? This person ...
27
votes
10answers
7k views

Is it foolish to borrow 2.5X income? [closed]

I base this question from USA Today, which claims that median household income is $59,000 and average household debt is $137,000. They say: suggesting that many Americans are living beyond their ...
1
vote
2answers
467 views

Can I transfer credit card debt to someone else?

My wife used my credit card in her business and used 20,000 (AMEX CARD) and then she couldn’t pay off the debt, now it’s hurting my credit and we wanted to move the debt from me to her, taking in ...
6
votes
4answers
286 views

What backs credit cards?

I'm admittedly a novice when it comes to finance, so this may be a stupid question... Are credit cards backed by actual money? To clarify, when I get approved for a credit card with a $10,000 ...
2
votes
1answer
187 views

Can credit card debt be negotiated?

A family member with Credit Card Debt has missed a few payments. The bank sent a letter saying that they would be willing to settle for 20% less of the current debt. Question: Can the debt be ...
1
vote
0answers
50 views

What happens to federal debt that passes to a collection agency and gets removed from credit reporting agencies?

Do medical bills from federal or state funded hospitals that have gone to a collections agency and subsequently removed from my credit report still have to be paid to the government?
26
votes
5answers
5k views

What method do I use to pay current expenses while paying off credit card debt?

I’m hoping you can help me with a question that seems very hard to google for some reason. I have $20K in debt on 4 cards, and I have set up a plan to pay off the deferred card on time, and the ...
1
vote
0answers
48 views

Effective interest rate versus straight line method [closed]

In order to account for financing costs & a placement premia/discounts of debt instruments, the effective interest method seems more elegant than the straight-line method (interest rate stays as % ...
1
vote
1answer
59 views

Will I be able to get an FHA home loan if I opt for a voluntary repossession on my current auto loan?

What i'm asking is will my credit go down that much and if I decide to voluntary repo? I'm currently at 650. If I can't get a FHA loan what are my options for buying a home with a repo on my credit ...
0
votes
0answers
46 views

Having Trouble Understanding YTW/YTC/callable bonds

I know intuitively that callable bonds have higher yields than a comparable bullet, but I'm having trouble seeing that on excel. For example, in the excel screenshot below, I know that if the ...
44
votes
3answers
7k views

Why would a lien appear on a mortgage after 17 years?

I have a 30 year, fixed rate mortgage from the year 2000. I have never missed a payment and don't have any other debt. A couple of months ago, I a got a letter sent by a company I never heard of (...
0
votes
1answer
109 views

Multiple credit cards for one debt? [closed]

Scenario: A person owes $30,000 in school debt to a single entity. The person also has THREE credit cards. Each month, the person pays $500 using credit card 1 towards the debt and $50 (minimum fee) ...
3
votes
2answers
149 views

Paying Off Student Debt Quickly

I'm 19 and transferred to a university. I left my community college with no debt. At my university due to my living situations I need to work full time. With that being said I have to have the vast ...
5
votes
6answers
3k views

Is it better to use cash when cards offer discounts

I am new to budgeting and managing my own finances and have a simple question. Is it better to use cash when credit or debit cards offers discounts. The city I live in, some shops and services offer ...
-3
votes
1answer
153 views

How to create my own fractional-reserve bank? [closed]

How can I create my own fractional-reserve bank to fund my companies? I want to do it to avoid paying interests to others, in addition to advantages of getting (a lot of) loans to create more ...
1
vote
1answer
122 views

How does “debt prescription” work in America (Utah if that matters)? [closed]

When googling for "debt prescription" I get a lot of hits in South Africa. Is it called something else in US English? And to the point, how does it work in America? Specifically contracts such as "...
2
votes
2answers
90 views

Debt to asset ratio calculation

When try to calculate debt-to-asset ratio, I came across different formulas. There are: Total debt divided by total asset, where Total debt = short-term debt + long-term debt from Balance Sheet. ...
7
votes
3answers
2k views

Debt consolidation on credit rating

I have the opportunity to consolidate some of my higher interest rate under a much lower APR in a personal line of credit. Would it hurt or possibly improve my credit score if I were to do this? Is it ...
0
votes
1answer
60 views

Approximation of equity value for company in default [closed]

I want to come up with an estimate for where the share price of a company may end up in a bankruptcy/event of default. What is a commonly-used rule of thumb for this? I know it will vary greatly from ...
1
vote
3answers
392 views

How can I deal with a spouse who compulsively spends?

My husband and I are in debt with student loans, credit card spending, and a mortgage. We've both made mistakes from when we were younger, but I am working very hard to dig ourselves out. On paper, ...
5
votes
3answers
320 views

Is it totally legal to refuse the payment of mature commercial paper debt?

I was reading up about commercial paper on investopedia. It says that commercial paper is a form of short-term unsecured debt. It then goes on to say that Commercial paper is not usually backed ...