# Why get rid of your debt



## Dirk (Mar 4, 2015)

*Why get rid of your debt?*

I read everywhere that you should get rid of your debt. This supposed to be very important if the next trouble is an economic crash. Why is this? If the crash is big enough, banks are all gone anyway.


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## coates776 (Sep 4, 2015)

I'm thinking if you are confined to your house for any reason for a long period of time you won't be able to work so can't pay any bills. A year later when things may get back to normal you would have a lot of your creditors chasing you for money. You may have been defending your home for no reason.


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## Dirk (Mar 4, 2015)

Might be. Probably also depending on what trouble is coming. Anyway, I am lucky. Almost all debts are paid. Like now paying my nice BOL in cash ;-)


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## Camel923 (Aug 13, 2014)

Good for you Dirk that your beating down the debt monster. Those in power and that ones owed money to will not cancel your debt. You will still be hounded to pay weather you can or not. I do not see the government giving you a Mulligan on taxes. Bankruptcy can only do so much. If you have acquired assets over a certain level, you will fore fit the excess.


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## AquaHull (Jun 10, 2012)

The Creditors may even be Asian


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## CWOLDOJAX (Sep 5, 2013)

At the very core of this is character.
You promised to pay your debt.

If the economy ever dramatically crashes along with a total govt collapse somebody will be looking for their money.

Someday, I hope we can get to an old, old economy of jubilee years. Every 7 years all debts are zeroed. People do not work for an entire year. Good stuff.

At least it's better than a mortgage (mort-gage, = From Anglo-Norman morgage, Middle French mortgage, from Old French mort gage (“death pledge”)).


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## Arklatex (May 24, 2014)

In a total collapse won't the bankers and debt collecters all be in the same boat as everybody else? They will be more worried about survival. 

I'm curious what happened in Greece. Their economy collapsed. What happened to all the people with debt? Did the lenders come and take their homes away?


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## rice paddy daddy (Jul 17, 2012)

The peace of mind that comes from reducing debt is priceless in and of itself.
My wife and I achieved debt free status in 2009. After many years of making do and doing without, we have:
No mortgage, all 4 trucks and cars are paid, no loans of any type, no credit cards, no utility bills (we have our own well & septic), not even a garbage disposal fee(I take it to the dump). We do not have a satellite/cable bill, just an antenna for the minimal TV we watch. The $30,000 horse trailer is paid.

Our expenses are: yearly property tax, electricity, and fuel, license & insurance on vehicles. Health insurance. Feed and hay for the horses, chickens and dogs. We grow a some of our food, reducing grocery bills. We keep chickens for eggs and meat. We have deer and locally raised beef in the freezer.

What a relief to have all this accomplished, knowing that if I was laid off tomorrow our world would not end. 
My wife has not worked outside the home since 1995, and I retire in 3 more months.


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## Slippy (Nov 14, 2013)

If you ask a man for a loan and you give that man a handshake and say you will repay that loan in full as well as follow the conditions of the loan, then pay it back. Simple.

I know I feel a whole lot better when I am not indebted to any man. 

Funny story, One piece of foreclosed real estate that I bought had some leftover items from the previous owner that lost the property back to the bank for failure to pay. After I bought the property, I informed the bank that I had no use for the items left by the previous owner and to please remove them from my property. A few weeks later they were removed and I began making improvements to the real estate. The previous owner sent me a letter asking where "his" items were, and that he wanted them back. I replied via a certified letter from an attorney. The letter was the most eloquently written "go to hell and die" letter I have ever seen! It cost me $200 but was worth it.


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## Ripon (Dec 22, 2012)

In a state of inflation, hyper in flation a debt would be a good thing. So long as worthless cash was truly available and you could accumulate it easily and use it easily (to pay now very small debts) it sounds great. But let me suggest two alternate crisis scenarios. 

A) we don't hyper in late we deflate. This already happened in America in the 1920's leading to the depression. In this scenario you will find payments in demand and harder to make. 

b) a currency change. Sure we inflate for a bit but then some politico group says all dollars are now green backs and for every dollar you owe we want three green backs, and no one will give you three for one.


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## Stick (Sep 29, 2014)

As of about six months ago, I am debt free for the first time in my adult life (65). It's a great feeling.


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## Gimble (Aug 14, 2015)

So I personally believe in paying back a debt. Like many have said, its a promise that you made. 

There is a great feeling that comes with being debt free that I'm hoping to find one day when my mortgage is paid in full. I'm working very hard on that goal.

But there are loans that were made in bad faith and if you have one of those, then you have your own moral dilemma.

I think the OP had a different issue in mind and that is paying off debts in an economic collapse doesn't make sense since there is no economy to pay from or into. I agree with this, but I can't predict when/where it will happen, so I work towards paying off the mortgage.

The really hard part is that there is always some reason to put off. This year we've had a few and there are a few more coming (Shmita, mid-october currency reset, US elections, etc).

And then finally when you do get it all paid off, you still have property taxes to pay, which admittedly aren't much... but are still a problem when you're supposed to live in a free country with natural property rights and one day you'd like to retire and not have bills to pay.


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## CWOLDOJAX (Sep 5, 2013)

Arklatex said:


> In a total collapse won't the bankers and debt collecters all be in the same boat as everybody else? They will be more worried about survival.
> 
> I'm curious what happened in Greece. Their economy collapsed. What happened to all the people with debt? Did the lenders come and take their homes away?


I'm not sure about Greece. That is a good question. 
I wonder if those poor folks in Cypress will get their money back? The Cypress govt ceased the citizens deposits AND took money from the Russians.


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## sideKahr (Oct 15, 2014)

Arklatex said:


> In a total collapse won't the bankers and debt collecters all be in the same boat as everybody else? They will be more worried about survival.
> 
> I'm curious what happened in Greece. Their economy collapsed. What happened to all the people with debt? Did the lenders come and take their homes away?


The problem is, things rarely TOTALLY collapse for economic reasons. Even if the banks fail, they survive, swallowed up into larger and more powerful banks, with your debt to them intact. In the Great Depression of the US, bankers did auction off the farms of the people who couldn't pay their debts. I'm not sure what's happening in Greece.


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## paraquack (Mar 1, 2013)

rice paddy daddy said:


> The peace of mind that comes from reducing debt is priceless in and of itself...


I totally agree. Expect for our mortgage, we were debt free back in 2004, and the mortgage was paid off in 2012. Had a mortgage burning party out at the camper as soon as we got the papers back. My budget is set up to make sure we are 3 months ahead of our bills. Plus a decent cushion in the bank.


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## CWOLDOJAX (Sep 5, 2013)

I have to admit. I envy many of you.
I've been debt free three times in my 37 years married.

However, since 2005 medical bills, mortgage, and a elderly mother-in-law ... well like one great American once said ... "The future ain't what it used to be." (RIP- Yogi Berra).
The good news is I am keeping my promise and I will (hopefully) be debt-free forever in 5 years... Lord willing and we're still America in 5 years.


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## Gimble (Aug 14, 2015)

Greece (and Cyprus to some extent) are a black hole of media. They are the elephant in the room that we don't talk about. Honestly I'm surprised this isn't on the news daily... but I think its being hidden for a reason... and that reason is that is where the US is headed and we don't talk about those things.

One of my preps is for a bail-in. I'm not going to be real happy about that and I don't know how the Cypriots "accepted" it.


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## sideKahr (Oct 15, 2014)

AskSteve said:


> Greece (and Cyprus to some extent) are a black hole of media. They are the elephant in the room that we don't talk about. Honestly I'm surprised this isn't on the news daily... but I think its being hidden for a reason... and that reason is that is where the US is headed and we don't talk about those things.
> 
> *One of my preps is for a bail-in.* I'm not going to be real happy about that and I don't know how the Cypriots "accepted" it.


How can one prep for a bail-in? I've been trying to come up with a solution to this myself. One could hold more cash, but there is risk there of theft, devaluation, and official confiscation. One can keep small amounts in many accounts to not meet the minimum for the skim, but I bet the officials will aggregate all your accounts before trimming them. Opening a foreign account is almost impossible for an American these days. It seems like the bankers have carefully closed all the exits.

P.S. As far as Cyprus is concerned, weren't the majority of the heavily bailed-in accounts owned by rich foreigners, mostly Russians? The common folk with small accounts were left alone. That's what I read, anyway.


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## AquaHull (Jun 10, 2012)

Cyprus lost 10% of the deposits.

The USA folks have lost way more than that with QE than Cyprus ever even thought of


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## Hawaii Volcano Squad (Sep 25, 2013)

I have no debt and pay off my usual expenses & bills every month. Very happy about that!


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## Ripon (Dec 22, 2012)

Do remember Cyprus was truly run as the modern Democrat in America would like; they confiscated 10% starting over $100k in the bank. IDK who keeps $100k in the bank and I don't feel like they should lose 10% of their deposits but true to leftist form they only toasted the elites. I suppose this is why you didn't see riots and looting such as Argentina after their collapse in 2000. You will notice our media never said much about that disaster.



AquaHull said:


> Cyprus lost 10% of the deposits.
> 
> The USA folks have lost way more than that with QE than Cyprus ever even thought of


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## Gimble (Aug 14, 2015)

sideKahr said:


> How can one prep for a bail-in? I've been trying to come up with a solution to this myself. One could hold more cash, but there is risk there of theft, devaluation, and official confiscation. One can keep small amounts in many accounts to not meet the minimum for the skim, but I bet the officials will aggregate all your accounts before trimming them. Opening a foreign account is almost impossible for an American these days. It seems like the bankers have carefully closed all the exits.
> 
> P.S. As far as Cyprus is concerned, weren't the majority of the heavily bailed-in accounts owned by rich foreigners, mostly Russians? The common folk with small accounts were left alone. That's what I read, anyway.


I prep for a bail-in by not keeping money in the bank. They can only take what they can get their hands on. I figure cash in hand is about 300x the value of cash in the bank. Most of the issues you bring up are issues you'd have in the bank as well, so I don't worry about that. As for official confiscation, there won't be anything to take by the time the feds get here.

From what little I know about cyprus, they left a few foreign banks open in the immediate "chaos" and those in foreign countries were able to get their money out -- all of it. I've also heard that it was a very well known in advance collapse. Of course this is all hearsay (as is any news these days)


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## tango (Apr 12, 2013)

Why would you not want to become debt free?


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## kevincali (Nov 15, 2012)

I'm "mostly" debt free. I only owe property taxes, and utilities. 

Plus some "other" bills (guns on layaway, paying off a trailer, etc) but those are all "wants" and not "needs". 


If I were to cease buying "wants", I'd be a very wealthy man.


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## Renec (Dec 21, 2012)

Venezuela is another media "black hole". Bad things are happen there right now. The population is struggling to get food,the Government has declared that "transporting food" is illegal and will confiscate it if you are caught. Armed Gangs roam the streets,robbing and going door to door taking what they want. Yet the Media is still busy ramming "Poor Moslem Refugees" down our throats.


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## Smitty901 (Nov 16, 2012)

I got rid of debt for my own well being. If S is going to hit the fan for any one of many reason that will trigger it , there is nothing I can do to stop it. I do prepare for it. That does not mean I will not keep right on living until it does. I will then use our preps to deal with what comes. Until then we live as if this roller coaster ride will just keep going as long as we buy a ticket.
Who I am and how I got to be how I am forces a reasonable life style, may not be the path for everyone but works for us.


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## Dirk (Mar 4, 2015)

Sounds like all will be ok then. Just paying my credit card every month and the last 10,000 USD for my house.


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## CWOLDOJAX (Sep 5, 2013)

Renec said:


> Venezuela is another media "black hole". Bad things are happen there right now. The population is struggling to get food,the Government has declared that "transporting food" is illegal and will confiscate it if you are caught. Armed Gangs roam the streets,robbing and going door to door taking what they want. Yet the Media is still busy ramming "Poor Moslem Refugees" down our throats.


We have a few families in my church from Venezuela. We offer ESL classes and they teach us Spanish for mission trips. Great folks. (Yes they're here legally).
They are very heartbroken over the difficult times their relatives are having there. They live near the Bolivian border and either get robbed by their own people or the Bolivian gangs.

Hard for Americans, I think, to grasp that.


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## Smitty901 (Nov 16, 2012)

Venezuela got what they ask for. Sad and painful many are suffering. But go back they had it made and a chance to really grow into a great country. They sold out to socialism and the promise of all free stuff. In the end they were enslaved. They must fix it. Hanging the socialist would be a good start.
Socialism is a S word Slavery.


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## Ripon (Dec 22, 2012)

tango said:


> Why would you not want to become debt free?


If you thought we were going to suffer 5-10-20 % annual inflation for 3 or more years but NOT a collapse debt would be a killer investment at today's rates. Let's say you were debt free and owned a home. So you go get a $100k mortgage against your home and buy a rental. Your mortgage is at 3 or 4% and inflation averages and costs $500 a month. In five years you paid $30,000 in payments. Meanwhile at 10% a year your home went up 50% and your rental 50% and you gained $150,000 or better said you kept up with inflation.


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## slewfoot (Nov 6, 2013)

Its a moral thing with me, I could not feel good about myself knowingly not paying a debt that I owe. 
I know not all can do what we have done but we worked at becoming debt free no mortgage, saved to pay cash for a new car 3 years ago. Now just owe the stuff you can't get out from under, insurance and things like that.


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## Stick (Sep 29, 2014)

kevincali said:


> I'm "mostly" debt free. I only owe property taxes, and utilities.
> 
> Plus some "other" bills (guns on layaway, paying off a trailer, etc) but those are all "wants" and not "needs".
> 
> If I were to cease buying "wants", I'd be a very wealthy man.


I could easily characterize gun purchases as "needs". At least, I always have...


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## parul1212 (Oct 28, 2015)

Debt may seem like a fact of life for many of us, but that doesn't mean it always has to be.


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