Fuck, I feel this so much. Debt can be so fun to build up but good lord paying it off sucks lol
Debt can have its benefits depending on the use case.
Expecting the average person to save up the full price of a house before buying it is simply an unattainable standard for most people to meet. The same can go for cars, too.
Sometimes, debt can just smooth out uneven pay periods. If you need to spend $200/mo, and in 2 months you get paid $150 and $250 respectively, you’ll need $50 of debt in that first month to smooth out your varied income, before paying it back in the 2nd month.
It’s primarily the predatory practices and systems (high interest, encouraging it where it’s not needed, hidden junk fees, etc) that make debt so harmful, not the fundamental concept of debt itself.
And oh, just a random fun fact you might actually find quite interesting, did you know that debt existed before money did? It was actually the primary thing that allowed individuals to engage in trade, and money only came along later as a means of tracking debt.
Doesn’t debts just go away after 7 years?
What are they gonna do, seize all my (non-existent) property?
Depends on the state you live in.
First there is the debt collectors ability to sue to collect. This varies by state and the type of debt in the U.S.
The delinquency is on your credit report for 7 years. After that you can request it be removed.
Federally subsidized student loans have no end date. These can not be discharged. This is the top reason that school tuition rates have skyrocketed. The lenders can loan people with no income vast sums of money little to no risk.
I had a roommate in college who married a citizen of another country. He applied and got approval for a work visa in their spouses native country. Before they left they paid off their federal student loans with credit cards. Something like $20-25K. They also had private student loans of around $10K. They then moved out of the country and went delinquent on the debt. They ended up moving back to the U.S. around 15 years later. By that time their credit report was empty.
Remember: If you kill yourself, all your debts get transferred to your next of kin!
Disclaimer: I don’t know if this actually happens. Wouldn’t surprise me though.
Most don’t, no (US). It just goes to your estate, so if you have anything of value that will be sold to help with it before it goes to any of your loved ones.
Disclaimer: I don’t know if this actually happens. Wouldn’t surprise me though.
It depends on the circumstance.
When you die, all your assets become part of your estate, which is usually then distributed either to your spouse, next of kin, or whatever individuals/nonprofits you name in your will.
If your house is part of that estate, and has a mortgage, then if your family wants to claim the house from the estate, they then have to take responsibility for, and pay the mortgage until they can sell the house, for instance.
If you owed a debt before you died, then died, and your estate had money in it, the lender would get to request that the estate pay off the debts owed before the family could lay claim to the remainder.
But in no way do any debts ever simply transfer from a deceased person to the next of kin without explicit consent, often within very specific situations, like taking claim of a house with a mortgage.
Wait hold on
Wouldn’t that mean that lenders have a vested interest in keeping borrowers alive especially if they have extreme net debt?
