Should I encoumber myself in debt?

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I enjoy excellent credit. I have been wondering if I should max out all of my credit resources before the roll over, turn it into cash and if nothing of great import happens, just pay it all back. Hell, if I pay it all back so soon, My credit will even improve by virtue of being a quick payer. Of course if everything goes TU, I would just have to wait till things improved to repay the loans. I would be heartbroken of course but what can one do? At 60 plus it is easy to promise, "I'll pay every cent back it it takes 30 yrs."

Survivors are not liable for a decedants bad debt nor can they inheret a decedents good credit.

-- Bill Solorzano (notaclue@webtv.net), November 16, 1999

Answers

I don't know, Bill. I can tell you that our personal approach to preparedness was exactly that opposite on this particular issue. That is, over the past 16 months, we greatly accelerated our efforts to get out of debt.

A couple months ago, with the exception of our mortgage, we acheived what we set out to do. We had to forgo some luxuries this past year and it could be argued that we failed to maximize profit. But since reaching this point, it feels pretty good.

It would not be accurate to say that we went this direction only because of Y2K. We had been moving in that direction slowly for the past five years. We stopped buying anything on credit at that time.

It would be fair to say that we accelerated our plans here due to Y2K.

Of course, you will have to decide what makes sense for you, but as you can see, Mrs. Rimmer and I lean more towards the reducing of debt argument going into this.

-- Arnie Rimmer (Arnie_Rimmer@usa.net), November 16, 1999.


Don't forget that you start paying interest immediately on cash advances. But if you truly believe that all hell is going break loose after the rollover, then max those babies out. Who will be around to collect on it? Use the cash to buy more food or guns.

-- You Knowwho (debunk@doomeridiots.com), November 16, 1999.

No. If you read the fine print many of those cards and loans state the companies can call up for the whole sum at their own determination.

I was reading an article last night that stated if people all run back to their banks within a short time period to put their cash back it will cause hyperinflation. That would mean you do not have the available allowance to pay those monthly installments, which in turn could bring about liens against you and your property which does impact heirs.

Obviously, the gas spikes coming, spikes not even the Feds are covering up, will raise prices of products and services.

Currency may also fluctuate. You could find yourself with a penny for every ten dollars you have right now.

It may also be in your best interest to have available all credit and loans you can utilize as a part of personal contigency. You can purchase older double wide mobiles many of which are in mint condition from 1500 to 10,000. (That does not include space rental and they are not on self-owned property.) You could do that on a credit card if your area is toasted or too miserable for your own tolerance. The transaction period is very short. Just a few days and up to the seller. Thus you can make a move darn close to "in a night." (Or worse, you might have to run out and make a purchase as that for one of those heirs of yours caught in one hecky darn of disaster. Dad to the rescue!)

-- Paula (chowbabe@pacbell.net), November 16, 1999.


'Survivors are not liable for a decedants bad debt'... Wrong...the estate of the deceased must first pay all creditors before any heirs can collect. Paula gave some really good advice...my husband and I have also gone the no debt route -- no debt whatsoever -- and yes, Arnie, it feels really good. We don't regret the loss of maximized profits...the peace of mind has more than made up for it. Our typical pattern used to be run it up, pay it off, run it up again. Now we don't use credit....in an emergency we could, but what we consider emergency is now a very small list of 3 items: medical emergency/need to rent a car/or reservation of airline tickets. Purchases of all consumer goods must be done with monies available or we don't do it. It does change the way you think about your own consumer habits.

Shelia

-- Shelia (Shelia@active-stream.com), November 16, 1999.


Concur with the 'no debt' folks. We, similarly, have paid off practically everything but the mortgage. Profit? Who cares? I can sleep at night knowing the bill collectors won't be knocking my door down. Being out-of-debt is the best profit imagineable.

-bruce

-- Bruce W. Roeser (broeser@ccgnv.net), November 16, 1999.



Let's see - the banks have how many systems, 100,000, that have to be made compliant, or some outrageous number. Listen up folks, debt is as imaginary as credit. Those lenders are conjuring up their loans out of thin air. So if you need supplies to carry you through, then borrow it. The banks aren't going to be around to collect. And get your hands on a few gold coins, just in case. This no debt route, I don't understand it. What's the point? Y2K isn't going to be a blip. No debt, no schmet. No debt is good in a regular society. Ain't gonna be one soon. Duh.

-- eeek (hiding@for.now), November 16, 1999.

Unfortuneatly, me and the Kook-ette can't afford to get out of debt AND get what we need to prepare. So, our tact has been to buy everything we'll need for huggin the ground and pay off credit cards later. Iff'n it gets really bad, who will collect? If it is the BITR, we'll eat our storage and use the displaced income to pay off bills.

I'd rather have bills and food then have no debt and no food!

Kook

-- Y2Kook (Y2Kook@usa.net), November 16, 1999.


There is debt, then there is debt. There is a big difference between maxing out credit cards and then taking the money and sinking it into something that may not pay off (e.g., the stock market, or for that matter, gold), and doing what you are proposing -- getting liquid cash, sitting on it, and see what happens in 2000. The idea being that if things work out just fine, you pay it back immediately, suffering only a couple of months of interest charges. If, due to circumstances beyond your control there is a huge meltdown, that cash may be a lifesaver. (Yes, even in a meltdown, cash would be useful in the INITIAL stages, while people still THINK that the electricity will becoming back on soon, and will not only accept but welcome cash for potentially lifesaving goods and services.) If things turn out sort of in-between, you may find it beneficial to just make minimum payments for a few months, while things shake out.

But be real careful, the last thing that you want to do is put yourself in the position that Y2K absolutely HAS to be the end of the world for you to come out ahead.

-- King of Spain (madrid@aol.cum), November 16, 1999.

we arent falling off a cliff on jan 1, take your time and see what happens, if things DO go nuts you can do it then

-- meagain (me@ok.com), November 16, 1999.

Amongst other things, debt has always seemed like an alien concept to me. I'm 35, never had a credit card, never buy anything on a payment plan, and I've done OK. This lifestyle has given me the opportunity to take about a total of 2 years off in the past 7, and I've never had to draw unemployment (or any other form of public assistance). I strongly advocate the Voluntary Simplicity lifestyle as a matter of course, Y2K or no Y2K.

Saying that though, if I TRULY thought that this was "IT", the end of the proverbial road, and I had credit cards, I'd max the suckers out and buy a TON of cigarettes and chocolate (and maybe even a few thousand condoms) for barter! Yeeeeehaaaaa!

But (for the record) I myself am hovering around a 7 or 8...possibly even a 9. So I'm not convinced that this is where the road ends for Western Civilization...just where the road becomes almost impassable for the majority of people traveling on it. Humans have an incredible ability to organize out of chaos...when they get tired of looting and raping.

-- Ludi (ludi@rollin.com), November 16, 1999.



So far, I have split my purchases between credit and earned money. I have enough earned money left to pay off the debt. If the banking situation deteriorates, I'll continue to split my purchases. I just don't have enough information to go on about which part of the banking/finance system will go down first. :(

-- Colin MacDonald (roborogerborg@yahoo.com), November 17, 1999.

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