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Old 12-26-2011, 04:43 PM
goindownshootin goindownshootin is offline
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I have long wondered what happens to debt if a collapse occurs. What happens to house payments, car payments, CC debt etc. obviously pay per use items (electricity, gas, etc..)wont be an issue. if you arent using it, you wont pay. But what about my house? I have plenty of equity, but dont own outright. have a car lease, not paid off yet. prolly a couple grand in CC debt that I float cuz i can. I could pay the CC's easily, but the resst not so much. Anyone have experience or have an understanding of what to expect after SHTF? What if the bank I owe my house to crashes...will they sell my debt, or will it be absorbed by another bank? Will they(can they) demand payment in full immediately? Just part of my prepping...want to know what to expect.
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Old 12-26-2011, 04:58 PM
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It depends a lot on what kind of SHTF and how far it goes.

In the 1930s with no jobs anyone who had a mortgage stood to lose their home.

Now if the banks all folded, and if the courts shutdown; then you could possibly get away with having debt.

But if it is anything less of an event, then your screwed. [along with having no job, no food, and no money].
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Old 12-26-2011, 05:47 PM
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FB's right, it depends on what kind of SHTF happens.

But more than that, it's when YOUR **** hits the fan. If you get seriously hurt next week and need to be out of work for three months, or if your employer closes his doors and you lose your job, that's TSHTF for *you*. If *those* scenarios happen, your mortgage, CC debt, and car lease will all still need to be paid, and they'll come calling if they don't get their money.

The economy could collapse in 6 months. The sun could put off a coronal mass ejection that slams our magnetic field with a worldwide EMP a year from now. North Korea's new charming little dictator could make himself a pain in our butts in 8 months to prove how manly he is. Or these things could NEVER happen.
But *tomorrow* you could be driving to work and some idiot t-bones you and puts you into the hospital for three weeks with 6 months of hard physical therapy and recovery.

Better to prepare for a situation where the debts would still be due and you'd need to find a way to pay them... which would consist of getting rid of as much debt as possible. (Sell the car and buy one outright, stop floating your CC debt, etc).
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Old 12-26-2011, 06:08 PM
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Quote:
Originally Posted by goindownshootin View Post
I have long wondered what happens to debt if a collapse occurs. What happens to house payments, car payments, CC debt etc. obviously pay per use items (electricity, gas, etc..)wont be an issue. if you arent using it, you wont pay. But what about my house? I have plenty of equity, but dont own outright. have a car lease, not paid off yet. prolly a couple grand in CC debt that I float cuz i can. I could pay the CC's easily, but the resst not so much. Anyone have experience or have an understanding of what to expect after SHTF? What if the bank I owe my house to crashes...will they sell my debt, or will it be absorbed by another bank? Will they(can they) demand payment in full immediately? Just part of my prepping...want to know what to expect.
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When other countries have gone through currency devaluations;
Everyone's saving was worth 75-90% less than what it was the day before.

The bankers took the homes if the mortgage was not paid,

The car dealerships took back the cars,

The credit card companies (unsecured debt) pushed folks into bankruptcy, and sold folks possessions in order to squeeze what they could out of people.

I don't know what would happen, but history suggests they average middle class Joe is going to get screwed.
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Old 12-26-2011, 06:17 PM
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The banks and everyone else in the financial world have been pushing the pay on line eletronic payment plan. They wanted to eliminate the written check. If tshtf and the grid,s go down and the net does to this will bite them in the a$$. There will be millions of people unable to pay their bills and if the net is hijacked [say by china] all info will be lost JMO but that is 1 thing im not worried about there would be so much upheaval in the worlds financial markets theres just NO WAY they could repo anyones home or anything else [JUST THINK ABOUT IT] millions of peopl,s info lost. I worry more about getting food then anything else.
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Old 12-26-2011, 06:43 PM
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I wouldn't put all my eggs in the "world's gonna end" basket, thinking you can just keep floating all your massive debt and wake up one day to find everything crashed and chaotic to the point where no one will ever be worrying about debt again. What a stressful way to live!

Pay it off now. Minimize. Sell the crazy things you bought but couldn't really afford. Have a 4 wheeler you only use twice a year that you still owe $3000 on? Sell it. A boat that you haven't taken out but once a year that you owe $9000 on? Sell it. A vehicle or house that you are under on? You get the drift. Yeah it's hard. Been there, done that. But it's soooo much easier once you've worked your tail off to get debt and mortgage-free! All that money freed up to go to buying land, building a house, socking away food and other preps, building that new barn... whatever.

The average American has way more house, more technological goodies, more vehicles, and more toys than they actually NEED. I look at childless couples who buy 5 bedroom, 3 bathroom, 3000 sq ft homes and am flabbergasted that they consciously decided to go into debt for hundreds of thousands of dollars on something so elaborate and unnecessary. Don't even get me started on the fools who go out and buy a new car every 3-5 years, rolling their debt from a previous vehicle over onto the new loan until they are so far under that they owe fully twice what the blue book is on their shiny new piece of the pie.

Don't dream of your debt magically disappearing. That's the lazy way out. That's shirking the responsibilities you signed on for. You can pay it off, and we'll all root for you along the way.
Old 12-26-2011, 07:26 PM
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... history suggests they average middle class Joe is going to get screwed.
Self-employed with no debt is a good place to be.
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Old 12-26-2011, 08:30 PM
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Nothing will happen to your debts. If your bank crashes someone else will pick up the assets and become your new creditor. If you don't make payments they can certainly demand payment in full immediately. The closer crunch time gets the more vigorous the collection efforts will become. As long as there is even a semblance of government you will still owe.

If the financial S well and truly hits the F, US.GOV will not be bothering to talk lenders into modifying your loan terms.
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Old 12-26-2011, 09:06 PM
goindownshootin goindownshootin is offline
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All good remarks. I guess I should say, I plan to keep paying...just dont know whom to pay. Our jobs are practically recession proof (if any are), and I just wonder if all the rules will be scrapped. if i never miss a payment (to whomever) my note should never be called in unexpectedly, that's my hope anyway. all in all, i wonder if new, unwritten rules will apply if TSHTF big time...like global financial collapse. My fear...even tho i'm making payments, the banks financials are so bad, that they confiscate all holdings to liquidate and fend off creditors. i guess anything's possible at the end of the world
Old 12-26-2011, 09:13 PM
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Quote:
Originally Posted by goindownshootin View Post
... What if the bank I owe my house to crashes...will they sell my debt, or will it be absorbed by another bank? Will they(can they) demand payment in full immediately? ...
The debt is probably not owned by the bank that wrote the loan. Most loans are immediately sold to Financial companies that deal in mortgages. It is one of the big problems that created the present housing crisis but that is rather complicated to get into right now.

They can not call your loan for the entire amount as long as you remain current on your payments. All of the legal stuff is spelled out in your loan papers which you should have read (and read again) concerning defaults and whether the loan could be marketed to other parties.

Regarding a crash of the system eliminating having to repay all debt. Probably the most unlikely scenario you would face. Though it does bring to mind the damage caused by the Tsunamis in Indonesia and Japan and how the citizens debt was handled after.
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Old 12-26-2011, 11:17 PM
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If the crash is ultimately due to inflation or attendant to it, here's one strategy to deal with it:

You need assets which will rise in dollar value with inflation. Suppose you have $10k in silver; suppose the price goes from today's $29 per ounce to $300 per ounce. That $10k in silver is now worth over $100,000k in dollars. Inflated dollars, to be sure, but dollars nonetheless.

And I will bet your mortgage says you have to pay in dollars, not uninflated dollars.

If you cannot afford that, then do what you can. If you have a lot of equity in your home and can afford the additional payment, might be worth thinking about pulling out some equity and using it to buy PMs. Refinance rates are so stupidly low right now that it may even be possible to pull out equity and keep your payment in the ballpark.

I refinanced in September, getting a 15-yr mortgage for 3.35 percent. Today that loan can be had (same credit score) at 3.1 percent.

Oh well.

But anyone else who hasn't looked at refinancing for a while should do so.

And I hope for all of you that your'e not underwater.
Old 12-27-2011, 10:57 AM
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Quote:
Originally Posted by ForestBeekeeper View Post
Self-employed with no debt is a good place to be.
Let's be honest here FB, self-employed with no debt, living on a self sufficient farm, and drawing a retirement check,
That is a good place to be.

I plan to join you as soon as possible.
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Old 12-27-2011, 12:07 PM
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Self-employed with no debt is a good place to be.

+1 self employed & totally debt free! CAN YOU SAY FREEDOM
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Old 12-27-2011, 12:13 PM
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Quote:
Originally Posted by ForestBeekeeper View Post

It depends a lot on what kind of SHTF and how far it goes.

In the 1930s with no jobs anyone who had a mortgage stood to lose their home.

Now if the banks all folded, and if the courts shutdown; then you could possibly get away with having debt.

But if it is anything less of an event, then your screwed. [along with having no job, no food, and no money].
No jobs also meant that property could be lost for lack of CASH to pay property taxes and a great many farmers were forced on the road seeking a way to make a living of any kind back in GP1. CASH was king. Today, or tomorrow when another depression sets in, cash is... what exactly??? Something? Nothing? Everything? I have no clue.

I don't see the courts shutting down. That's just not going to happen, in my opinion.
Old 12-27-2011, 12:19 PM
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Quote:
Originally Posted by Hick Industries View Post

When other countries have gone through currency devaluations;
My wife sent me this link:

http://www.stansberryresearch.com/pr...49/6PSIMC01/PR

I haven't watched it all, but what I saw is sobering.
Old 12-27-2011, 12:47 PM
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Let's be honest here FB, self-employed with no debt, living on a self sufficient farm, and drawing a retirement check,
That is a good place to be.

I plan to join you as soon as possible.
No.

I am not in the ideal situation myself.

I think the ideal is Self-employed with no debt.

I have no mortgage, but I do have a loan on my tractor and on my wife's commuter car.

My pension could go away at any time. I have heard it as one option in the Federal budget debates. Or if I were ever convicted of a felony I would lose my pension. Of if SHTF, if banking shuts down, if DFAS shuts down; then all Federal pensions will stop.
Old 12-27-2011, 12:53 PM
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Quote:
Originally Posted by REM View Post
No jobs also meant that property could be lost for lack of CASH to pay property taxes and a great many farmers were forced on the road seeking a way to make a living of any kind back in GP1. CASH was king. Today, or tomorrow when another depression sets in, cash is... what exactly??? Something? Nothing? Everything? I have no clue.

I don't see the courts shutting down. That's just not going to happen, in my opinion.
Property taxes are usually tiny as compared to mortgage payments.

Stop paying both and which one will get you evicted first? The mortgage will, not the back taxes.

It is my understanding that during the G.D. all farmers who had mortgages, lost.
Old 12-27-2011, 01:02 PM
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No mortgage, around $1700.00 on the VISA. The only thing I have to worry about are the property taxes. I'm still stocking the cellar and will keep on until I have enough food for at least 4 to 6 months. Right now I have enough stored for about 3 months @ 2000 calories a day. Keep prepping.....
Old 12-27-2011, 01:35 PM
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it is curious though...the S has not hit the fan yet...but there are so, so many people living in homes with mortgages that they defaulted on years ago...

cant even imagine how bad it will be if we do have a true economic collapse.

and we are headed there...
Old 12-27-2011, 02:56 PM
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Your debt will survive.

Banks will be absorbed by other banks, cc and car debts the same.

Start paying stuff off.

Maybe even burn the cc.
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