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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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 ...
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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-...
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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 ...
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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 ...
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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 ...
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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 ...
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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 ...
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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 ...
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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 ...
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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 ...
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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?
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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 ...
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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 ...
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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.
...
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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 ...
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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 ...
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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 ...
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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 ...
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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 ...
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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 ...
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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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