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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9
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2answers
33k views

Construction loan for new house replacing existing mortgaged house?

Let's say I buy a home with an ordinary thirty-year mortgage, intending to renovate the house slowly and live there a long time (ten years at least). Five years into the mortgage, however, I decide I ...
9
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3answers
566 views

Help: Being charged interest on a loan for which I received no statements telling me of this debt for the past 15 years. Surprise!

Is this legal? This was a private loan within a small business. I was under the assumption that the bill was paid in full 15 years ago. My only drawback is that I never got them to sign to verify the ...
9
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2answers
1k views

Can you calculate the ROI on your credit score?

I've heard it said from people who work in the industry that your credit rating isn't a measure of your ability to pay, but rather a measure of how profitable a customer you are. I've also heard ...
9
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2answers
442 views

How much is enough to save as a rainy-day fund before I start plugging my higher-interest student loans?

Typically, what is considered realistic? 6 months expenses? A year? I understand this is more of an "opinion" question but I am still curious what people think is a responsible buffer (in the event of ...
9
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2answers
255 views

Credit Consolidation, Credit Settlement

I've done a little research but I would like to have actual feedback from people. I am currently behind on credit card payments and I am not sure exactly what to do. The interest rate is high and I do ...
9
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3answers
474 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 ...
8
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4answers
3k views

In Australia, how to battle credit card debt?

I have $18K in credit card debt. What are my options in tackling this? Every month I am left with no extra money to pay anything more than minimum payment required (car, rent, another personal loan, ...
8
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5answers
8k views

Pros and cons of filing bankruptcy or paying off debt?

My credit has been trashed by me making some dumb decisions, and I'm working with a debt settlement company. A few of the debtors are unwilling to negotiate with the debt settlers and are threatening ...
8
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3answers
7k views

INR 10 million borrowed from friend at 7% interest per annum

If my friend transfers INR 10,000,000 into my bank account and we make a legal document for the same to return the amount at 7% per annum for next 12 yrs, should I pay tax on the same? If my salary ...
8
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5answers
4k 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 ...
8
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4answers
984 views

How to get started with savings, paying off debt, and retirement?

I am getting married soon and I am in grad school (I get paid a stipend and have a tuition scholarship). I have no retirement plans available to me. My fiancee will be starting her job soon and will ...
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8answers
1k views

Using Credit Cards while Paying off Higher interest debt

I was hoping to get some advice regarding my plan for paying down my debt. I'm planning to start using the avalanche method to start paying down my balances, but with a slight modification. I have ...
8
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4answers
927 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 ...
8
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3answers
370 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 ...
8
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2answers
3k views

Should I cash out some of my retirement to pay credit card debt?

I'm very recently divorced and have accumulated the following credit card debt, both during my marriage and during my separation, when I struggled to get by while paying both a mortgage and rent on my ...
8
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5answers
776 views

Formula that predicts whether one is better off investing or paying down debt

This is more of a statistics/probability question but the implications for personal finance are obvious. Let's say you have extra cash (assume tax-advantaged space is already maxed out) and are ...
8
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1answer
557 views

What is a rule of thumb for accruing debt on a rental property?

My sister and I were fortunate enough to inherit 2 properties from my father, one a suite of apartments and cottages worth about ~$3M and also his home. We currently have about $200K in mortgage ...
8
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5answers
747 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 ...
8
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2answers
743 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 ...
8
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1answer
2k 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 ...
8
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2answers
472 views

Cash out retirement account or sell and downsize the house to pay off line of credit?

I am in my mid 40's and I have an outstanding secured line of credit with a large balance that I want to clear. I can only come up with 2 scenarios to clear this amount based on my home equity and ...
8
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1answer
397 views

If I claim my parent on taxes does that make me responsible for their past debts?

I have supported my parent for most of the year and paid for everything. Housing/food/transportation and other things. So I want to claim them on my taxes. My concern is this: They have a large ...
8
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5answers
441 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 ...
8
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1answer
383 views

How can I resolve the IRS letter about owing tax on cancelled debt when I did make credit card payments on a payment plan?

My wife had defaulted on her credit cards in late 2012/early 2013 due to financial circumstances. In mid-2013, we setup payments with issuer and that was that. We filed taxes for 2013 and didn't ...
8
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1answer
453 views

Pay off debt with RRSPs, or refinance and roll into Mortgage?

A few years of a combination of under-employment and trying to keep afloat a floundering business has left me (us) with 50k debt on a line of credit and a credit card. We are getting 5k back from ...
8
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1answer
988 views

Is it correct to take interest swap rates as a prediction of future bank rate?

In the context of managing the risk of (non-fixed rate) debt where the interest rate is linked to a bank base rate, I want to understand how/where to get a sense of where a bank's base interest rate ...
7
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5answers
4k views

Can I use my paid-for home as collateral for a consolidation loan to pay off outstanding bills?

I'm needing to find out if I can use my home and its feed as collateral for a 3000-5000 dollar loan to pay off my outstanding bills and just have one payment.
7
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8answers
5k views

Would the minimum payment or full CC amount be considered monthly debt?

Based on Is rent considered a debt? The question of: What is your total monthly debt payment (e.g. student loans, vehicles, credit cards, personal loans, etc.)? got me thinking. If you rack up $...
7
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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 ...
7
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4answers
1k views

At what point should I go into credit card debt?

This may be a stupid question, but I will ask anyway. At what point should I stop using up my cash savings and start accumulating debt on a credit card? When I try to Google for advice about going ...
7
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4answers
539 views

Would it be better to borrow money from an elderly relative than from a bank?

Would it be better to borrow money from an elderly relative than from a bank?
7
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3answers
3k views

Debt Collection Agency wants $30 for an unpaid Newspaper subscription

I'm a college student in the United States, and for an Economics class I was taking I needed a subscription to the Wall Street Journal, so during the first class we filled out a subscription form with ...
7
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4answers
221 views

When does credit card counseling work?

I have a friend who has $18K in credit card debt and makes $25K a year. I think this person needs help, and I've thought about recommending credit card counseling. However, I've also read articles ...
7
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2answers
3k views

Buying house on a loan when you're just starting a career

I am 25 year old Indian in the beginning of my career i.e this is my second year after entering the workforce. I am working in Japan. My salary does not leave much extra after my personal ...
7
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2answers
3k views

Joint ownership on home (50/50), when I apply for a loan, do they look at total mortgage payment as debt or half?

I am in joint ownership of a home (50/50). When I apply for a car loan and they are looking at my credit report, do they look at the total mortgage payment as my debt or only half? Does the credit ...
7
votes
1answer
2k views

How do I tell the Canada Revenue Agency that they're sending someone else's documents to my address?

A business acquaintance used my address for mail correspondence, with my permission. Actually, he even didn't stay in my place and I don't have any of his personal belongings here. Later, I asked him ...
7
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1answer
1k views

Student debt in arrears from living overseas- what to do?

I have been living overseas for 3 years and did not inform the student finance company (stupid, and totally my fault!) and they have recently sent me a letter asking to confirm my employment status- a ...
6
votes
5answers
408 views

Clear (agreed) overdraft or start emergency fund first?

From what I have read, the general consensus is that it is best to set up an emergency fund first and foremost before beginning the process of clearing debt, regardless of how illogical that approach ...
6
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4answers
313 views

I have a secured line of credit (substantial balance) as well as a retirement account. Am I wisest to pay off my debt before contributing to my retirement account?

What if it will take me 15 years to pay off my debt? Should that ALWAYS be what I pay down first?
6
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5answers
1k views

How can people have such high credit card debts?

Apparently, the average US household has US$16000 in credit card debt, with even college graduates having US$2000 by the time they graduate. In Canada, this figure is almost CA$27000. For comparison,...
6
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4answers
666 views

Best way to repay parents for college

I am at a point where I can start repaying my parents for college. Is there any financially beneficial/smart way I can/should go about doing this? Or is using taxed income and mailing a check to them ...
6
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4answers
4k 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 $...
6
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1answer
212 views

Borrowed Canadian Money and paying back in US

My husband borrowed Canadian money from his relative to pay for his American education. At the time the Canadian dollar was .50:1. Now the exchange rate is 1:1 and we are paying back the debt in US ...
6
votes
2answers
614 views

Is it possible to pay off a friend's debt without them being taxed on it?

I'm in England. Let's say my friend has £45,350 salary, and a credit card debt of £5,000. Were I to pay that debt off for them, would that £5,000 from me count as income, increasing their tax bill? ...
6
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3answers
1k views

Should I Pay Off my Student Loan Debts First or Invest in an Index Fund?

I am an Albertan currently about $8,000 in debt from student loans. Roughly $5,500 of this $8,000 is an Alberta Student Loan, while the rest ($2,500) is from the National Student Loans Service Centre (...
6
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1answer
987 views

Refused for Debt Consolidation Loan. Why would I be denied this loan?

I have numerous maxed-out credit cards and a half-used store account and I'd like to pay them all off with a consolidation loan, to reduce the interest I'm paying and clear them all up quickly. I'm ...
6
votes
1answer
489 views

Upside down on car loan, sell and refinance gap?

In order to cut down our monthly expenses we are looking to sell our car. We still owe $12,000, kelley blue book says its worth around $10,000 and we don't have $2000 lying around to cover the gap. ...
6
votes
3answers
818 views

Getting over that financial unease? Budgeting advice

I recently moved from Arizona to Oregon to take advantage of free schooling (which ironically enough, I originally moved from Oregon to Arizona because I wanted to go to college there). Before the ...
6
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2answers
383 views

Medical bill in collections

I am a college student that had surgery in 2014 on my gallbladder and subsequently became very ill and needed a necessary test to prove a a diagnosis my gastroenterologist suspected. He recommended ...
6
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1answer
1k views

Does total US public debt include state debt?

When I see total US public debt, I wonder whether state debt is included. If "total US public debt" used differently for different cases, I will restrict my case to the usage in national accounting/St....

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