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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7 votes
3 answers
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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 ...
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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 ...
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  • 73
0 votes
1 answer
30 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 ...
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1 vote
3 answers
65 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 ...
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-3 votes
1 answer
296 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), ...
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-1 votes
2 answers
218 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 ...
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  • 925
0 votes
1 answer
53 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 ...
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  • 103
2 votes
1 answer
94 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?
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2 votes
3 answers
238 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 ...
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  • 347
0 votes
0 answers
25 views

How does Etoro calculate Total Debt to Equity ratio?

I am trying to understand the Balance Sheet report in Stats page that show on each company listed in Etoro. I understand that the formula for Debt to Equity ratio is just that : Debt/Equity and maybe ...
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0 votes
1 answer
85 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 ...
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  • 2,594
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 ...
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  • 585
10 votes
2 answers
290 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 ...
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  • 499
0 votes
2 answers
110 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 ...
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  • 665
29 votes
6 answers
4k 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 ...
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  • 2,327
27 votes
2 answers
7k 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 ...
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3 votes
2 answers
181 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 ...
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7 votes
3 answers
408 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 ...
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1 vote
3 answers
336 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 ...
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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. ...
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  • 461
1 vote
0 answers
37 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 ...
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0 votes
2 answers
59 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 ...
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  • 65
1 vote
2 answers
86 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 ...
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  • 14.8k
1 vote
3 answers
400 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 ...
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  • 19
0 votes
1 answer
74 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 ...
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1 vote
2 answers
197 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 ...
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  • 111
4 votes
2 answers
188 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. ...
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  • 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. ...
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  • 131
0 votes
1 answer
80 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 ...
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1 vote
1 answer
307 views

How to manage the money I got from "lump-sum housing lease"?

In South Korea, there is a concept called "jeon-se", which can be roughly translated into "lump-sum housing lease" or "long-term rental deposit". It goes like this: An ...
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3 votes
1 answer
331 views

Why would student loans be valued at $1.04 for every dollar of debt?

According to this Yahoo! Finance article, the Department of Education has some analysts who attempt to estimate the value of the Department's student loan portfolio: For years, bean counters at the ...
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0 votes
4 answers
262 views

What would most likely happen if you owed money to a business upon completion of a service but realised that you don't have a way to pay?

I came pretty near this situation, but luckily I had an extra debit card (although I would've preferred to use my credit card). I was at a vet to prepare my pet for a surgical procedure, and they ...
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20 votes
5 answers
7k views

Why don't most people file Chapter 7 every 8 years?

Please explain to me why more people don't follow a formula like this: Converting all their assets into exempted assets (for which there are tons of options, regardless of your state -- ERISA-...
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  • 343
2 votes
0 answers
59 views

How many "Charge Offs" can a company put on a single debt?

A while ago I took out a loan and couldn't pay it off due to loosing my job. I got another job, and before I could start making payments, a collections agency called me up about the loan. I paid it ...
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  • 121
0 votes
1 answer
48 views

General price lowering and debt hypothetical

Assume for a moment that the CPI accurately encompasses all prices. Also assume that I have $100 of outstanding debt. Let's now say that the CPI decreases by 25%. In real terms, this change in CPI ...
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7 votes
1 answer
1k views

Does paying down debt in an S Corp decrease profitability?

Long story short - I'm a participating shareholder of a small S Corp that has debt. At the end of the year, since it's an S Corp, the profits/losses are passed down to the shareholders to be reported ...
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  • 295
1 vote
1 answer
61 views

The term "debt financed" as a source of payment for doing the Acquisition, is it?

I have a question for word phrase "debt financed" in Acquisitions but for my best understanding, I would like to ask a question on random example: Let's say we have three companies: CompanyA,...
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  • 11
1 vote
2 answers
196 views

Which should I pay first, Car Loan vs Zero-Interest Credit Card Promo?

I have a new car loan for $12k at 7.74%, and about $10k in old credit card debt that I just transferred to a card with a ~20% APR after the initial 13 month zero-interest promo. (So, I am not being ...
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  • 11
3 votes
2 answers
233 views

Does credit score show you are a responsible borrower or a profitable client for the bank?

This might be a silly question, but I'm trying to wrap my head around how the US Credit Score works. I'm from Europe. Credit Score represents creditworthiness, which as I understand it, represents a ...
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  • 39
3 votes
4 answers
556 views

Why do most companies have debt and are there any companies without debt?

Somewhat inspired by this question. It seems that no matter what company I hear about, they always have some sort of debt to someone. Even if the company is in great financial shape and makes tons of ...
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  • 979
0 votes
2 answers
141 views

Is it possible to keep mortgage after bankruptcy?

If one declares a bankruptcy, can he or she keep his/her mortgage account and continue repaying it, while erasing all the other debts? In general, is it possible to negotiate to keep some credit ...
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  • 187
5 votes
5 answers
2k views

How can one be financially devastated by unsecured debt?

My question is theoretical, I don't understand why people say that big piles of debt are dangerous. If one has a lot of unsecured debt and ends up defaulting on it then one does not even have to ...
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  • 187
1 vote
1 answer
91 views

Creditworthiness of counterparty

Based on historical evidence, a B-rated counter party is approximately 16 times more likely to default over a 1-year time period than a BBB-rated counter party. Over a 10-year time period, a B-rated ...
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2 votes
3 answers
320 views

Question About Medical Bill Defense

So, I've been researching for a quite a bit and haven't been able to find a case or ruling that relates close to my situation. I went to a sleep specialty physician about four years ago who was ...
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  • 29
2 votes
3 answers
382 views

Disputing a collection on an account that is current, but the collection agency wants the original debt amount

I have a surgery bill (Original Balance: $2,757) that I have been paying off for the past 2 years with auto-drafted monthly payments. Every month on the 1st a payment was auto-drafted from my checking ...
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  • 247
0 votes
2 answers
332 views

Debt in a foreign country

I have spent couple of months in Lithuania in the beginning of this year. I signed up for a gym membership for 1 year. But due to covid, I left Lithuania and came back to my non-EU home country. (I ...
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25 votes
5 answers
10k views

If a bank fails, will debt be wiped out?

I have debt to Capital One. If they fail, and whoever the trustee is fails, will the debt eventually get lost in bankruptcy proceedings? Considering the Lehman bankruptcy is still ongoing, well past ...
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2 votes
4 answers
576 views

Do companies destroy value when they borrow to pay dividends?

When public companies pay dividends, their stock price will be reduced by the amount of the dividend. This makes sense to me, but I'm wondering if this applies when companies borrow to pay dividends (...
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  • 14.8k
2 votes
1 answer
569 views

So I was used as a money mule and now I have a CIFAS marker I desperately need to get rid off?

so some time back I was used as a money mule without realising by someone I trusted very much. Once he had everything he wanted (money) he then blocked me leaving me with a debt of more than £5000. I ...
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  • 21
1 vote
1 answer
136 views

What are some good reasons to buy U.S. Government debt (Treasury bonds)? [closed]

Treasury bonds issued by the U.S. Government are considered virtually risk-free, because they are backed by the U.S. Government's ability to tax in order to pay them off. I understand that Treasury ...
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