# paying off debt before SHTF?



## db2469

I've heard conflicting advice about if one should pay off their debts before the SHTF or not to even bother because of the possible anarchy, new world order and one world currency that may result...thoughts?
DB


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## partdeux

paying off debt is a good thing...

Interest is commonly referred to as a stupid tax.

I "was" debt free, but recently took a home equity loan on my paid off house to "loan" to my oldest to buy her house. Long story, but we decided the risk was acceptable.

If you're depending on currency collapse to avoid paying debt, good luck. It's either not going to matter, or you'll be indebted to the slave masters.


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## Magus

When you see the cloud, max it out!
Who's gonna collect under an inch of fallout?


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## mosquitomountainman

I've been in debt and but now I'm debt free. I like being debt free a whole lot better. The only people are for debt are those who believe hyperinflation is just around the corner. They may be right and they might also be wrong. I like the statement that interest is the stupid tax. There's a lot of truth in it.


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## Beaniemaster2

If you are totally prepared with everything you would need if SHTF, then yes, pay off your debts, if you are not, I would use that money to get supplies first and just make the minimum payments for now, you may not have that chance later... Yes, you will end up paying more interest, etc., but what price would you pay if you wasn't prepared???


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## FatTire

All wealth is predicated on infinite debt. This is how modern plantation slavery is managed. You work to service debt, that's all your income tax pays for. If all debt was paid, there would be no money supply. 

Stop using money. The vast majority of my preps were gotten via barter. 

If you work and pay for credit cards and taxes, you are a slave.

Free your mind.


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## Magus

Truthfully,I've never had a credit card ever.
I saw that fool's errand a mile off! 

Living is easy for a simple man with a simple mind:
If I can't eat it, wear it, get high on it, screw it, fix my stuff or kill something with it, I must truly analyze why I want it.

9 times out of 10 it gets left there.


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## CrackbottomLouis

I recently paid off all debt except for student loans. It was a considerable sum. If shtf and makes that decision pointless Im gonna be pissed. I really wanted a new weapon, ammo, food and an rv!!


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## BillS

The fear is that the government will adjust loan balances for inflation and that those adjustments will favor the lender and not the borrower. That's one of the reasons that some people stress paying off debt. That was the thinking by Larry Burkett in his book "The Coming Economic Earthquake".

Your approach to debt is probably best decided by how soon you think the collapse will happen. I think it happens before the election. If you think it's going to happen five years from now that will change how you handle your money.

Given the uncertain nature of the economy I think it makes sense to conserve cash now and not pay off anything earlier than you have to. That gives you more flexibility if something bad happens to you financially like losing your job.

I think the most important thing is to be prepared now and worry about the credit card payments later. You don't want to be starving after it hits the fan and think, "But hey my debts are paid off."


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## Magus

That's good advice BillS.I'm proud of you.

But debt is like an enemy, best not to have it to begin with than fight it when you don't expect it.


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## db2469

Good posts...of course when the collapse occurs when one has been making his payments on time, even though there is a balance left, he shouldn't be penalized with a bad credit rating after the whole system breaks apart and the bills stop coming and everything changes...
DB


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## partdeux

db2469 said:


> Good posts...of course when the collapse occurs when one has been making his payments on time, even though there is a balance left, he shouldn't be penalized with a bad credit rating after the whole system breaks apart and the bills stop coming and everything changes...
> DB


Depends... the financial tin foil hat crowd believe the super rich elitists are going to use this as the opportunity to own everything (which they already do), but more importantly to totally control everything without those pesky government controls.


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## alwaysready

partdeux said:


> Depends... the financial tin foil hat crowd believe the super rich elitists are going to use this as the opportunity to own everything (which they already do), but more importantly to totally control everything without those pesky government controls.


Very true we could see a return of the robber barons.


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## The_Blob

alwaysready said:


> Very true we could see a return of the robber barons.


:scratch whenever did they leave?... :dunno: :gaah: :ignore:


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## BillS

db2469 said:


> Good posts...of course when the collapse occurs when one has been making his payments on time, even though there is a balance left, he shouldn't be penalized with a bad credit rating after the whole system breaks apart and the bills stop coming and everything changes...
> DB


It's very possible there won't be consumer credit at all anymore.


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## partdeux

BillS said:


> It's very possible there won't be consumer credit at all anymore.


Never happen. It was the consumer credit that created this super power position for the elitists to get into.


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## BillS

After the collapse we'll be living in a post-industrial world without electricity. That could very well continue after the government regains control of the country. That would fit in perfectly with the environmentalist goals of the administration. Besides, the big banks will already own much of the world. Everything from government bonds and corporate bonds to mortgages that people won't be able to pay off to entire industries in third world countries that they gain control of when the government defaults. Their ultimate goal was wealth and power in a world government. They will have achieved that. I don't think they'll care to lend money to subsistence farmers who can't pay them back in cash.


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## paguy

Pay off the debit and be free of the bs of financial issues.


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## mosquitomountainman

partdeux said:


> Never happen. It was the consumer credit that created this super power position for the elitists to get into.


As much as I detest the exhorbitant, profiteering, greedy loan sharks who issue credit cards, everyone who signed is just as much to blame. The lenders created the means for the common man to mortgage their souls but no one that I know of was forced to borrow from them. It was the borrowers greed that made it possible for the credit card issuers to gain control over them. One is just as much to blame as the other.

It's time for the common man (and woman) to get back to that little thing called "delayed gratification."

Bill S. -- Even in ancient history people still mortaged their souls only then it was often for essentials like food! That practice will still continue as long as the "have's" seek to control the "have nots." I know you're a Christian. Check the Old Testament for examples.

If you want to keep financial freedom don't get greedy and be able to produce everything you need to survive.


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## k0xxx

We made getting out of debt a priority. While there may be something to the ideas of paying off debt with hyper-inflated dollars, or the elimination of debt due to a societal or technological breakdown, we didn't want to bank (_pun intended_) on those scenarios happening. Now that we are debt free, we can move forward with other more pressing needs.

Well OK, we're not exactly debt free in that we still have the yearly rent, called property tax, to pay. That being said, we have put back enough PM's to cover the taxes for more years than my wife and I could ever live. Enough for the children too, in all likelihood.


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## TheAnt

BillS said:


> The fear is that the government will adjust loan balances for inflation and that those adjustments will favor the lender and not the borrower. That's one of the reasons that some people stress paying off debt. That was the thinking by Larry Burkett in his book "The Coming Economic Earthquake".
> 
> Your approach to debt is probably best decided by how soon you think the collapse will happen. I think it happens before the election. If you think it's going to happen five years from now that will change how you handle your money.
> 
> Given the uncertain nature of the economy I think it makes sense to conserve cash now and not pay off anything earlier than you have to. That gives you more flexibility if something bad happens to you financially like losing your job.
> 
> I think the most important thing is to be prepared now and worry about the credit card payments later. You don't want to be starving after it hits the fan and think, "But hey my debts are paid off."


Great post! I agree with much of what you said though I dont know that debt would be adjusted for inflation -- but I suppose they rob us in other ways.

OP, you have to prioritize your spending. You would be best off to save your cash (*maybe* not in a bank) and pay off bills all at once. For example, if you owe 20k on your house save up 30k over the next three years and pay it off in one lump sum. Concentrate on one debt at a time (prioritized properly) and you will be better off that way. What happens if you have saved up 18k towards paying off the house early and something happens that you need cash NOW. I can guarantee you wont be able to get a loan on your house these days... better have the cash!


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## Tex

If you owe a debt, why wouldn't you pay off what you owe. It would be wrong to intentionally avoid your debts. The proper thing to do is avoid debt in the first place and live within your means.


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## db2469

You're right, but most folks have credit card debt and IF there is an economic collapse, then the dollar will be history, society as we know it, including currency, will be radically changed: a kind of starting over with little likelyhood (imo) of ever having to pay those debts....instead, many could use that money now to prepare for the SHTF but I would recommend making your payments until that time in case that time never comes (yeah right)...
DB


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## Immolatus

Not quite sure where to go on this one.
The obvious answer is 'no' because of the devaluation. The question is how long can you wait for that to happen? While most of us here believe something is 'imminent' that dont mean were right.
I have a little credit card debt left to pay off after paying it furiously this year (We like to travel). I completely understand that if the economic system goes to hell then paying off the debt was a mistake, but I just cant stand it hanging over me.
It would depend on your individual situation and what kind of debt youre talking about. (Oh thats helpful)
If a collapse doesnt come, and youve been hanging on to the debt waiting for the day while paying interest on it, then youre SOL.
I think the smart answer would be to pay it off, maybe not as fast as possible, but maybe a little more than the average of the most you can afford and the least you would pay (which is hopefully more than the minimum).
If were talkin mortgages here, the 'conventional wisdom' says dont pay it off for a coupla reasons. First the interest tax deduction and secondly (this doesnt really apply anymore) that you should at least theoretically be able to get a higher interest rate on your savings through investing that youre paying on your mortgage.
Personally I do not have a mortgage or pay rent. No more details.
FWIW, I do NOT agree with the conventional wisdom. Forget the stupid tax deduction. Think of how much better off you would be without a mortgage payment? Simple as that.
Just MHO.


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## MsSage

Sorry, thinking about waiting so you dont have to pay off what you owe is wrong. You recieved something with the agreement to pay later...so if you dont pay, you in essence stole it from another.
Just because you are paying the bank back for cc or mortgage it doesnt matter, you knew the terms when you signed for the items. 
You have to assess your situation and use the main item you have for surviving. 
For me to pay off my mortgage would be unwise. For my S/O to pay off "his" would be very wise. 
Each person/family has to do what the right thing is for them.


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## BillS

Tex said:


> If you owe a debt, why wouldn't you pay off what you owe. It would be wrong to intentionally avoid your debts. The proper thing to do is avoid debt in the first place and live within your means.


As long as you're making the minimum payments you're not avoiding your debts. And if your work hours get cut you could easily find yourself not living within your means.


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## TheAnt

BillS said:


> As long as you're making the minimum payments you're not avoiding your debts. And if your work hours get cut you could easily find yourself not living within your means.


Exactly!

Dont get me wrong, paying off debt is a GREAT thing to do but don't pay more than the minimum if it means opening yourself up to more risk now. Thats why I said that you should pay the minimum payment, pay a little extra into a savings account (as a sort of "rainy day fund") until that "rainy day fund" has more than enough to pay off your debt.

Say you owe 20k, save 23k and pay off the 20k debt. This leaves you with a 3k rainy day fund. The point being that it benefits you NOTHING to pay double your payment every month until you only owe 3k then lose your job and have no money to get you through the next six months. The bank is not going to let you skip some payments because you are ahead. Pay them off on your terms. Meet your obligations but pay them off on your terms.

Everyone should strive to have six months of cash available to them in some kind of savings (not necessarily in the bank) in case a personal SHTF comes your way. This should have a higher priority than paying off your debts early.


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## Ration-AL

TheAnt said:


> Everyone should strive to have six months of cash available to them in some kind of savings (not necessarily in the bank) in case a personal SHTF comes your way. This should have a higher priority than paying off your debts early.


^ my thoughts, the only thing i would even consider trying to pay off early is your house just because of the high dollar loan amount and interest, you actually do better off making an extra payment once a year in that regards but everything else, screw 'em you made an agreement, you make your payments on time, sort yourself out first then worry about lining their pockets, like ANT said it's not like they will let you slide because your ahead, better off to put that money somewhere will it can actually work for you!

that said though, i only have 1 credit card for 1.5k and my house, beyond that i don;t use credit ever, if i can;t pay for it up front i probably shouldn't buy it, the 1.5k is for emergencies only and is supplemented by a cash fund in a savings account , credit has it's it's place but mostly it's a fools game, i made a mistake and got caught in that money tree payday advance thing when i was a teenager and that taught me very quickly how credit really works!


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## Immolatus

I would like to address the 'morality' issue that some have brought up.
I totally respect the fact that yall think its wrong not to pay your debts, and you are right.
I would just like to point out that a lot of organizations you deal with on a daily basis (the credit card companies and YOUR BANK!!!) have no such morality code. A main reason why a lot of us are even on this forum is an economic collapse. In said collapse, your bank, where you supposedly have YOUR MONEY, could easily just plain not have it. Vaporized (Corzined!)
Both the banks and the credit card companies have no problem taking YOUR TAXPAYER DOLLARS when they are in trouble (has anyone had their bank taken over by the FDIC?).
My point is this:
If you borrow money from your buddy, family, even a total stranger (an individual) you are morally obliged to pay that debt. But when dealing with corrupt organizations (banks and cc co's) I at least have to point out the fact that they do not possess the same moral compass as you, so why would you put them in the same category as a debt to your buddy?
I am sorry, but given that they would have no problem stealing from you, you would be a 'sucker' in their eyes for you to view them with the same moral judgement. All debt is not created equal. Its great to take the moral high ground, but you are not on a level playing field.
Are you even sure who owns your mortgage? Do you have that big of an issue with potentially ripping off JPM (Chase)?


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## db2469

Good post Immo...if the dollar crashes and the chaos begins, do we think it'll be no problem getting our money from the banks? Is the FDIC going to cough up every cent to the millions who want their money? And what about the 401K's, IRA's, etc. they hold? Kiss it all goodbye!! I, personally, will continue to pay my modest debts until the SHTF but I believe after that, those debts will be forgotten or ignored as the world tries to pick up the pieces from a broken system...
DB


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## Immolatus

Thanks db.

Just happened to find this today.
For shame on this guy for not paying his debts, right?

Found from this article.


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## labouton

db2469 said:


> Good post Immo...if the dollar crashes and the chaos begins, do we think it'll be no problem getting our money from the banks? Is the FDIC going to cough up every cent to the millions who want their money? And what about the 401K's, IRA's, etc. they hold? Kiss it all goodbye!! I, personally, will continue to pay my modest debts until the SHTF but I believe after that, those debts will be forgotten or ignored as the world tries to pick up the pieces from a broken system...
> DB


I believe that during the depression,the banks are the ones that made out. They took over property that the owners couldn't pay on. I may be wrong on that but I believe that is what I heard.


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## db2469

labouton said:


> I believe that during the depression,the banks are the ones that made out. They took over property that the owners couldn't pay on. I may be wrong on that but I believe that is what I heard.


Probably so, but according to many, THIS time will be much worse and with everyone fighting for survival, what banks will be open for business? In fact, who, in the stricken country(s), will even go to work? If no one works, then no one can send you a bill for your monthly payments, so....well, you know the rest...
DB


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## k0xxx

I don't see any difference between a mortgage, credit card debt, student loan, or money borrowed from Aunt Martha. If someone isn't forced into the debt, then they are morally (as well as legally, in most instances) obligated to pay the debt. I don't base my own morality on how I perceive the morality of others. Now if times got tough and I had to choose who gets paid, chances are that I would probably pay Aunt Martha first.

*labouton*, you are correct. Many people were forced into being homeless for not being able to pay their mortgage. Many more were made homeless because they could not afford their property taxes.

It may indeed become so bad that society breaks down into utter chaos, and nobody keeps track of debts, but I wouldn't bet my family's future on it. Unless we devolve into a civil war and Balkan type open fighting, you can bet that someone will keep track. In every modern example of a non-war induced currency collapse, the debts were still on the books. You can bet that even in a devaluation, that politicians will probably legislate something to favor the banks.

YMMV


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## labouton

I can certainly see the "utter chaos". As db2469 said, "THIS time will be much worse and with everyone fighting for survival". During the depression in the "30's, people had a lot harder way of life. Not everything was given to them as it is today. Everyone, it seems, is looking for handouts or at least for government support. It wasn't that way in the '30's. I remember my father talking about walking back to a CCC camp to try to find work and his meal for the day was a "belt sandwich". That's when you take up another hitch in your belt to make your stomach think your throat hadn't been cut Oh yes, it could be real chaos!!


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## k0xxx

labouton said:


> I can certainly see the "utter chaos"...


I can see where it _could_ happen also and I have planned accordingly to the best of my ability, but I suspect that we will look much more like Argentina, rather than the Balkans. It may just be wishful thinking on my part, though.


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## hiwall

I think it is a personal choice. I hated being in debt and having that hanging over me. If you want to hear the song you got to pay the piper. Live within your means. It is what got us in this situation. A mortgage is one thing but credit card debt often indicates that you are not living with in your means. Paying the credit card company 20% interest and hoping for the fall of society is not a good plan IMHO.


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## BlueShoe

If you own tangible real estate property, then you have a debt which you can never pay off in the form of yearly property taxes.

I don't use credit cards with 20% interest. I use the ones with promotional rates of down to 0%. I just paid one off with a 1 yr zero % rate and no transfer fee. They just sent me another offer of 16 months of 0% but it's a 2% transaction fee. I think I'm going to do it since I can take a home loan and turn it into unsecured debt for a couple hundred dollar fee and avoid the interest of the home loan by dropping from 5% to 0%.


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## baconexplosion

In my opinion, if you borrow money and you don't intend to pay it back it's stealing, regardless of the circumstances. Pay off your debts and live free, good or bad times.


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## mojo4

All this talk of not paying debts is stealing reminds me of happy gilmore's grandma, "I would have paid them but I didn't have any money!" Credit card debt is banks giving you money based only on your word you will pay it back. Bu how will you do that if you can't find work?? I don't care if someone racks up hundreds of thousands in credit card debt and doesn't pay it back cause its not my money. Believe me, if credit cards actually lost only pennies for banks you couldn't find one with a search warrant. Ever wonder why every bank you've never heard of is always sending you credit card offers?? Cause its a cash cow for banks. So rack up the debt if you want cause if doomsday hits they either won't collect or more than likely you will be among the masses who can't find work and couldn't pay jack squat anyhow.


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## k0xxx

Statements like the one above are what gives me a real concern for where we may be headed. During the Great Depression, a majority of the people seemed to have a moral compass and some dignity. Today, I see more and more people basically saying "So what? It's not my money". If we do end up in some type of deep financial crisis, as in a currency collapse, a lot of folks will probably be justifying taking resources from others by saying something similar.

Taking on debt with the_ intention_ of not paying it back is stealing. Period. Finding yourself not having the resources to pay back the debt (after the fact), through no fault of your own, is not. YMMV


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## BlueShoe

Well, I don't think people need to give the major "too big to fail" banks any quarter. They've been underhanded and got rescued for being lousy stewards of the assets you have to hand them. I say 'have to' give them, because people don't want to stuff money in their mattresses. And we HAD to bail them out due to their scams and schemes. The largest banks are still doing the same things that made them go bust a few yrs ago. 

I know two wrongs don't make a right. I don't have the same opinion of small banks and credit unions.


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## BillS

k0xxx said:


> I don't see any difference between a mortgage, credit card debt, student loan, or money borrowed from Aunt Martha.


That's fine. But that doesn't mean I have to pay off anything early. In fact, If I had $20,000 in gold and $20,000 on a mortgage I think it would be crazy to sell the gold and pay off the mortgage. As long as I'm making my payments I've met my moral obligations. That's different with money you borrowed from Aunt Martha. You should pay that off as soon as possible.


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## Davarm

You really want to "Screw" the banks and financial institutions that caused so many of the problems today? Easy answer

Dont posses or use credit cards, loans(secured or unsecured) and say the "Screw My Credit Score". The credit score and the availability of credit to borrow your future away is what has steered this society toward finincial collapse and like it or not, if you participate in it you are enabling those "Big Guys" to bully you and continue to destroy the country.

Before you say that "You cant survive today without borrowing" I will tell you, myself as an example, that you can. I own my own home and property free and clear, I drive a 12 year old Tahoe and I grow much of my own food. I haven't borrowed a cent since the mid 90's and I haven't "inherited" any windfalls.

All it takes is a different mindset. You can talk about how they have(finincial institutions) caused this mess we are in but if you use them, aren't you at least partially responsible?

I know this will rub many the wrong way but this is my $.02 worth on the subject.


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## BlueShoe

I'm about to own my 2nd home free and clear. I've just been putting off paying that house off in favor of toys. I owe about 4K. I drive a 1998 truck myself. I own all my vehicles outright. I'm screwing the bankers right and left.


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## k0xxx

BillS said:


> That's fine. But that doesn't mean I have to pay off anything early. In fact, If I had $20,000 in gold and $20,000 on a mortgage I think it would be crazy to sell the gold and pay off the mortgage...


I didn't realize that I had said or implied anything to that affect. While I am an advocate of being as debt free as possible, I do not think that selling off PM's to do so is the best move in the current situation (especially if you are able to meet your obligations). If I were unable to meet my debt obligations, then I would probably do so, but that's just me.

For me, being debt free is important because I can see the possibility of financial trouble ahead. I was also fortunate enough to be able to save for twenty years and purchase this modest rural property outright and move here at a relatively young age of 42. That was 12 years ago, and we have had the time to get it ready and prepare for what we believe is coming. We also drive a older vehicle, that we could afford to purchase without financing. The only monthly bills that we have are utilities, and we have our yearly property taxes. One of the reasons that we chose this state to move to, was the fact that the property taxes are low enough, that our little stash of PM's will cover the taxes until long after I'm gone.



BillS said:


> ...As long as I'm making my payments I've met my moral obligations. That's different with money you borrowed from Aunt Martha. You should pay that off as soon as possible.


I agree with you on all counts, especially in regards to the "moral obligations". It is unfortunate that a lot of people these days do not recognize the "moralities" involved in debt. It seems that the whole concept of "my word is my bond" has been lost. And that to me is a shame.


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## oldwindrow

done posting where illegal fantasies are promoted.


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## k0xxx

oldwindrow said:


> ...When the shtf, the debt won't matter at all. Who has the better aim, and the most efficient firearm usage, that along with a little luck is who's gonna win in the end...


History would suggest otherwise. There has never been an example (in modern times, I'm not a student of ancient history) where an economic collapse has devolved into a societal collapse. The most recent example of Argentina is an excellent example. Society goes on, albeit much poorer, but debt remains. Those that are relying on our entire society collapsing into a Mad Max scenario, as a way to become debt free, may be disappointed by reality.


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## db2469

k0xxx said:


> History would suggest otherwise. There has never been an example (in modern times, I'm not a student of ancient history) where an economic collapse has devolved into a societal collapse. The most recent example of Argentina is an excellent example. Society goes on, albeit much poorer, but debt remains. Those that are relying on our entire society collapsing into a Mad Max scenario, as a way to become debt free, may be disappointed by reality.


I would tend to agree but if the dollar collapses, wouldn't there have to be another currency to take it's place? And how are we supposed to get the new currency to pay our debts? And why should we be penalized for not paying during that collapse, especially if no one mails or delivers a monthly bill?
DB


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## lilmama

Well let's look at the south after the civil war. Everyone who owed on their homes or couldn't pay the taxes had their homes taken away. They lost everything and had to start all over again. 
This is my fear that they say pay up and I can't.


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## k0xxx

db2469 said:


> I would tend to agree but if the dollar collapses, wouldn't there have to be another currency to take it's place? And how are we supposed to get the new currency to pay our debts? And why should we be penalized for not paying during that collapse, especially if no one mails or delivers a monthly bill?
> DB


There could be a new currency eventually, but it's more likely that the Dollar's buying power would just erode at a faster pace, ie., inflation would accelerate.

If a new currency does eventually replace the Dollar, it would probably be issued at so many Dollars, to one of the New currency. If you had 1000 Dollars in the bank, after some point it would be "converted" to say, 300 (an arbitrary number) of whatever the new currency is.

As to why people would be penalized for not paying their bills..., I find it hard to believe that politicians would suddenly start passing laws to protect the citizens, rather than to protect banks. But that's just me.


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## db2469

It might all depend on how bad the collapse is..
DB


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## goatlady

Many of the previous suggestions have merit and are valid IF the potential ecnomic collapse ONLY hits different areas of our country. All those tales of Depression era farms being forclosed on by banks happened because there were other people who had $$ to spare and invest and to purchase those forclosures. Seems to me, even in today's market, that scenario is not holding true. How many forclosed homes are sitting in a banks inventory, not selling to anyone for any price? Times have changed and what held true in past depression is NOT holding true in today's economic climate. My local bank hold the mortgage on my place and has 90% of their outstanding mortgages held in house, not sold to other financial institutions. I doubt very seriously my local bank will be in a position to foreclose on 90% of their mortgages and sit there insolvent with all those empty homes in the banks inventory, generating a negative on the books. In fact, I doubt the bank will even be in business at a time like that. As for credit cards, my card's interest rate is less than my mortgage interest rate and my mtg rate is 7.5%. I have paid it off twice in 30 years, at my present age I may never get it paid off nor my mtg. so I just make the payments and keep on living and prepping. When my SS stops coming in, those payments will stop also, nothing I can do about it, so why worry.


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## BlueShoe

db2469 said:


> I would tend to agree but if the dollar collapses, wouldn't there have to be another currency to take it's place? And how are we supposed to get the new currency to pay our debts? And why should we be penalized for not paying during that collapse, especially if no one mails or delivers a monthly bill?
> DB


There will be a replacement currency and a black market as well as a barter system. The latter two will exist before the replacement comes in because it probably won't be like a light switch turning off or on.

Then you will only be allowed to convert a certain amount of one asset to the new currency. Bank on that. People with PMs who think they can convert them freely will find they have to take the additional "beyond the allowable limit" commodity to the black market to cut in a middle man. It might even be that you are limited to the amount of the commodity you can legally own in the first place.


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## virgeniaW

yes, I've heard that too.In most instances it happens.


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## virgeniaW

Definitely your right! one in debt are obliged to pay. Let me share you the news I've read happened in rarely cases. It is about Thomas Daigle.He had paid his debt through saving large amount of coins. Fortunately his bank let him pay off debt with pennies.Well it's a fun idea to drop off a wheelbarrow full of one-cent pieces at one's bank, but not all institutions will let one do so.I can't believe this Massachusetts man saves to pay off debt with pennies


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## ContinualHarvest

Pennies are legal tender in the US. Cash is cash.


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## mercygirl87

BillS said:


> The fear is that the government will adjust loan balances for inflation and that those adjustments will favor the lender and not the borrower. That's one of the reasons that some people stress paying off debt. That was the thinking by Larry Burkett in his book "The Coming Economic Earthquake".
> 
> Your approach to debt is probably best decided by how soon you think the collapse will happen. I think it happens before the election. If you think it's going to happen five years from now that will change how you handle your money.
> 
> Given the uncertain nature of the economy I think it makes sense to conserve cash now and not pay off anything earlier than you have to. That gives you more flexibility if something bad happens to you financially like losing your job.
> 
> I think the most important thing is to be prepared now and worry about the credit card payments later. You don't want to be starving after it hits the fan and think, "But hey my debts are paid off."


Do you really think the gov clowns are gonna allow that to happen before the election? No doubt its gonna happen real soon, but I cant see the fools letting it happen before election. It may not look like it to all of us, but they are in full control of things. I am trying to decide if I should get a new roof now, before its unaffordable to me, or wait three years when its truly at its end of life. It is just about there now. Or should I pay off the house with my "emergency" money? Roof prices are crazy high.


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## BillS

mercygirl87 said:


> Do you really think the gov clowns are gonna allow that to happen before the election? No doubt its gonna happen real soon, but I cant see the fools letting it happen before election. It may not look like it to all of us, but they are in full control of things. I am trying to decide if I should get a new roof now, before its unaffordable to me, or wait three years when its truly at its end of life. It is just about there now. Or should I pay off the house with my "emergency" money? Roof prices are crazy high.


The collapse of the dollar is not something that can be delayed once is starts but it might not happen before election day. If we have a collapse before election day we'll have riots and insurrection throughout the country. That would give Obama the excuse to declare martial law and "postpone" the elections.

Whether or not you replace the roof now would depend on how much it costs, how much emergency money you have, and whether or not you're fully prepared. If you're fully prepared it wouldn't be bad to do it now. I wouldn't pay off the mortgage with my emergency money. I'd take half of my emergency money and buy junk silver coins as insurance against hyperinflation. I bought my junk silver here:

http://www.providentmetals.com/coins/us-silver-coins/coin-90-silver-us-junk.html?limit=all


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## Padre

BillS said:


> The fear is that the government will adjust loan balances for inflation and that those adjustments will favor the lender and not the borrower.


Granted that our increasingly lawless government can do whatever the heck it wants, might makes right these days doesn't it...., and that includes trying to tax 100% of your income, but who exactly is afraid that government will adjust balances for inflation?

All my debts are governed by contracts which do not allow for adjustment for inflation other than the compounding interest which they will collect whether inflation is 5 or 5000%. I suppose government COULD do this, but if the did we would really be up a creek because all appearance of the rule of law would have disappeared. Also this sort of move would only happen if the government was presupposing hyper inflation, which most governments try to avoid the thought of...

I think there is a BIG distinction that needs to be made in this discussion between SECURED and unsecured debt. There is really no arguing that SECURED DEBTs are dangerous to your safety and that preppers ought to work to eliminate this type of debt. Secured debt, if you default on it, could result in the repossession of your house, car, or whatever you put up as collateral, and that is IMHO far too much of a risk.

The issue is unsecured debt. The argument here is that its better to have the food, supplies, and guns needed for a SHTF and (unsecured) debt, which you could theoretically default on, and which might even be forgotten is the S really HTF, than to have no debt and no beans, bullets, or bandaids...

Lenders take a gamble when they lend that a) you will pay it back AND also b) that their interest rate will earn them money despite inflation. I have argued in the past that if you felt particularly strongly that economic collapse was likely or immenent, then perhaps you might take a gamble of your own, namely that the lenders will loose the second (B) part of their gamble, that inflation will one day soon out place their interest rate, so that (if you still have a job during hyper-inflation) you may end up paying LESS in REAL DOLLARS in spite of the interest rate.


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## k0xxx

Padre said:


> All my debts are governed by contracts which do not allow for adjustment for inflation other than the compounding interest which they will collect whether inflation is 5 or 5000%. I suppose government COULD do this, but if the did we would really be up a creek because all appearance of the rule of law would have disappeared...(snip)


It seems that I remember the Feds bailing out GM and stiffing secured creditors in favor of the UAW, in spite of a couple hundred years of contract law to the contrary. Whether we agree with the decisions or not, the secured creditors had a legal contract that by law should have been upheld. So yes, the Government COULD do this.


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## partdeux

k0xxx said:


> It seems that I remember the Feds bailing out GM and stiffing secured creditors in favor of the UAW, in spite of a couple hundred years of contract law to the contrary. Whether we agree with the decisions or not, the secured creditors had a legal contract that by law should have been upheld. So yes, the Government COULD do this.


Not completely accurate... as debtor in possession of GM, they get to set the rules. Nobody else had the capital to be debtor in possession.


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## k0xxx

partdeux said:


> Not completely accurate... as debtor in possession of GM, they get to set the rules. Nobody else had the capital to be debtor in possession.


I stand corrected. Thank you.


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## Padre

k0xxx said:


> So yes, the Government COULD do this.


As I prefaced both the beginning of my post and noted in its conclusion, a lawless government cans do what they want, my point is no one I know is voicing a fear of this, no politician has to the best of my knowledge even suggested it and even if they did its unsecured debt so why would you be afraid of having a bad credit rating during a collapse? It's not like your are going to get credit or be able to use it post SHTF...


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## tsrwivey

goatlady said:


> Many of the previous suggestions have merit and are valid IF the potential ecnomic collapse ONLY hits different areas of our country. All those tales of Depression era farms being forclosed on by banks happened because there were other people who had $$ to spare and invest and to purchase those forclosures. Seems to me, even in today's market, that scenario is not holding true. How many forclosed homes are sitting in a banks inventory, not selling to anyone for any price? [/yQUOTE]
> 
> That's not the case everywhere. Some areas of the country have experienced relatively low unemployment & foreclosure rates & home values have remained consistent. Will that be the case next time? I don't know.


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