debt: It’s not nearly as bad as everyone says it is

[Cricket22]

Just teach people it isn't a big deal to welch on huge debts they owe, make it legal and that problem is solved like a dream.

In the United States, you can not "welch" on student do, nor can It be eliminated through bankruptcy. If you do not pay, they will come after you. They can garnish your wages, seize whatever assets you have, and continue until they get their money.

Yes, you can enter into a repayment plan, and should, but if you miss a month or two, there are consequences.

[Daerio]

In the United States, you can not "welch" on student do, nor can It be eliminated through bankruptcy. If you do not pay, they will come after you. They can garnish your wages, seize hwtever assets you have, and continue until they get their money.

Yes, you can enter into a repayment plan, and should, but if you miss a month or two, there are consequences.

He was saying it's a problem that people "psychologically" don't like debt.

I was implying there's a good reason for them not to like debt: they have to pay it back.

Congress does not have this issue.

[Barnabas]

What? They can garnish your wages and steal your tax refund every year.

Oh, and then they can turn the debt over to a collection agency, and then it does appear on your credit report.

Lol if the creditor takes you to court then you negotiate it down to basically what they bought the debt for. Other than that fico 9 gives them a big middle finger. You just wait 7 years and make sure you pay everything else off.

[Daerio]

Lol if the creditor takes you to court then you negotiate it down to basically what they bought the debt for. Other than that fico 9 gives them a big middle finger. You just wait 7 years and make sure you pay everything else off.

Yeah, I know a lot of people who are on the constant 7 year plan. "I'll get out from under this interest rate one day!" "I'll stop having shitty credit one day!"

Keep running that credit treadmill.

So once again, medical debt is the #1 cause of bankruptcy, even though it's apparently lulzy to avoid paying it after they confiscate your tax refund, garnish your wages, and then ruin your credit for 7 years.

[Aori]

I don't like debt either, I didn't buy anything I didn't have money for. However when I was doing well for myself in 2010, I was looking into buying a modest home, I couldn't get a loan even doing 40% down because no credit history. So I had to generate a fake "debt" with credit cards. Now I have 8 credit cards, 35% utilization 30% of that is medical bills I can't shake because of hard times.

Bankruptcy is the last thing I want to do, my credit is pretty good now, sitting around 750 score with Experian. So while it is stressful and a struggle, building good credit takes so much time. I really don't want to ruin that if at all possible.

I just irks me when people talk about Bankruptcy like it is some get out of jail free card.

[Barnabas]

Yeah, I know a lot of people who are on the constant 7 year plan. "I'll get out from under this interest rate one day!" "I'll stop having shitty credit one day!"

Keep running that credit treadmill.

So once again, medical debt is the #1 cause of bankruptcy, even though it's apparently lulzy to avoid paying it after they confiscate your tax refund, garnish your wages, and then ruin your credit for 7 years.

If you have some constant condition that is expensive then you are in another boat. I'd just move out of the US if you can't get coverage. For one time ailment they don't do much and you can always negotiate it to much less than if you are an idiot by letting them do what they want. Medical billing is full of errors.

[Daerio]

If you have some constant condition that is expensive then you are in another boat. I'd just move out of the US if you can't get coverage. For one time ailment they don't do much and you can always negotiate it to much less than if you are an idiot by letting them do what they want.

What kind of real-world experience do you have with medical debt?

[Deleted]

Guy says taking on debt is a good thing because it will help you towards a brighter future, eg, take on student loans, get a good job, become wealthy, etc. He talks about countries taking on debt too.

I know in agriculture you can't survive if you don't take on debt. You should have zero or negative equity I think they say.

I took out student loans. I also borrowed from an uncle which turned out to be a bad idea cause I was slow in paying him back.

The whole text sums down to this:

In other words, there’s smart borrowing and foolish borrowing. As they say in the economic serenity prayer: Keynes grant us the wisdom to know the difference.

Indeed, taking a loan for a much-needed and carefully-planned investment for the future is one thing; but taking a loan to live in opulence until reality hits back hard is another.

[Barnabas]

What kind of real-world experience do you have with medical debt?

I've negotiated a medical stay down significantly because I'm not paying full retail like most people would.

[Cricket22]

He was saying it's a problem that people "psychologically" don't like debt.

I was implying there's a good reason for them not to like debt: they have to pay it back.

Congress does not have this issue.

So true, especially where it concerns congress.

[Lady Dragonheart]

*Shrugs.* Most of my adult life was spent being in severe debt, essentially all of it not being my fault, unfortunately... incurring the debts of others. Fortunately, over the last decade or so, I gotten from pretty severe debt to being upper middle-class. I much prefer it like this, granted not being tied down to a resource-exhaustive debt-incurring significant other helps dramatically. >.<

[Cricket22]

I've negotiated a medical stay down significantly because I'm not paying full retail like most people would.

My husband got his entire hospital stay written off completely, and he was actually just hoping for around a 20% reduction.

Even with insurance, our "share" of that bill was $14,000, but again, he went ballistic, mainly because he was pumped up on prednisone (Even after I warned the doctor that it makes him psychotic), and after calling the billing department every single day for over a month, they wrote off the entire bill.

However, he blamed his entire illness directly on the hospital, and it actually was their fault.

[Daerio]

I've negotiated a medical stay down significantly because I'm not paying full retail like most people would.

What a badass.

Defying what inelastic goods are like you never took economics, but you're still a master negotiator.

[chazus]

So once again, medical debt is the #1 cause of bankruptcy, even though it's apparently lulzy to avoid paying it after they confiscate your tax refund, garnish your wages, and then ruin your credit for 7 years.

And they can STILL come after you for debt, even after bankruptcy.

My husband got his entire hospital stay written off completely, and he was actually just hoping for around a 20% reduction.

While cool, this is an outlier.

Most people can't pay off their medical debt, and people continue to hound them their entire lives.

[Barnabas]

What a badass.

Defying what inelastic goods are like you never took economics, but you're still a master negotiator.

So you need a phd in economics to understand that there is a price insurance companies pay versus what you pay out of pocket? So if the greedy ass healthcare provider decides to rape you instead of accepting the lower price the insurance company pays you are just supposed to bend over and spread your ass cheeks? If you want to lose your house, uncles dog and sisters virginity to pay the doctor be my guest. Don't complain about it if you aren't willing to fight them over the price they charge. The inelasticity comes from the consumer accepting said debt without a whim.

[Daerio]

So you need a phd in economics to understand that there is a price insurance companies pay versus what you pay out of pocket? So if the greedy ass healthcare provider decides to rape you instead of accepting the lower price the insurance company pays you are just supposed to bend over and spread your ass cheeks? If you want to lose your house, uncles dog and sisters virginity to pay the doctor be my guest. Don't complain about it if you aren't willing to fight them over the price they charge.

Millions of Americans are fighting them every day, I guess you're just super special.

[Cricket22]

I don't like debt either, I didn't buy anything I didn't have money for. However when I was doing well for myself in 2010, I was looking into buying a modest home, I couldn't get a loan even doing 40% down because no credit history. So I had to generate a fake "debt" with credit cards. Now I have 8 credit cards, 35% utilization 30% of that is medical bills I can't shake because of hard times.

Bankruptcy is the last thing I want to do, my credit is pretty good now, sitting around 750 score with Experian. So while it is stressful and a struggle, building good credit takes so much time. I really don't want to ruin that if at all possible.

I just irks me when people talk about Bankruptcy like it is some get out of jail free card.

I understand how you feel, however I've just known far too many people who have been bound and determined to attempt to pay off a medical debt, that was virtually all but impossible, and instead of filing bankruptcy right away, spent many years basically living in poverty, while debt collectors garnished their wages, took everything they had, while continuing to hound them day and night.

I personally feel that it is horrific that medical debt can, and far too often does, completely wipe out absolutely everything people spent their entire lives working to build.

I see no shame in filing bankruptcy, and no, it's not a "get out of jail free card", but it puts a prompt end to the stress and humiliation far too many people endure from debt collectors, for absolutely no other reason than they got sick.

Bankruptcy also no longer carries the same stigma it once did. Yes, it still carries some, but during the recession, so many filed that it's viewed somewhat differently. For example, many car dealers will agree to give you a car loan immediately afterwards, especially since at that point, you have no other debt, and can't declare bankruptcy again for 7 years.

No, I've never filed bankruptcy, however if by chance you ever do, you should also try to keep at least 1 credit card with a zero balance. Credit cards with a zero balance do not have to be declared during the bankruptcy proceedings, and after your bankruptcy is complete, you still have a credit card to use to start building your credit.

- - - Updated - - -

And they can STILL come after you for debt, even after bankruptcy.

Most people can't pay off their medical debt, and people continue to hound them their entire lives.

I'm not understanding. How can they continue coming after you for debt, even after bankruptcy? To The best of my knowledge, the only debts which are not dischargeable are student loans, child support and back taxes.

I honestly want to know, so please answer.

[Xenyatta]

I see a lot of people who say they want to be completely debt free. I did that for 8 years and it screwed me over ROYALLY. I had no car payment, no bills other than the typical electric and rent bills, no credit card bills... no misc. debt. I lived by paying cash for everything and I owed no one anything and I was happy with that for the most part. No cash = no item... til the day came I needed a car. Because I lived this way for SO long, my credit was basically "turned off". There was no credit record of my life on file any longer so getting that car was next to impossible. It was like trying to swim through lava to walk away with a car anywhere. I finally found a dealership willing to take me on with the co signature of my mother's (most dealerships wouldn't even accept that) but even then I had a terrible interest rate. I'm ok with debt so long as it's healthy debt.

[TirielWoW]

And this entire conversation is going to ignore the other half of this equation?

What about the people holding those debts, and living their entire lives based on usury? Those people sure add a lot of 'value' to the economy.

What about the fact that 40 years ago, interest payments on debt for the average American was almost nonexistent, and now "the average household is paying a total of $6,658 in interest per year. This is 9% of the average household income being spent on interest alone."

When 10% of the economy is going towards paying interest... it's a pretty serious problem. People hate math though, and they hate economics even more, so I can understand why nobody really seems to get it, or care.

Most of that debt isn't held by people.

[Celista]

My husband got his entire hospital stay written off completely, and he was actually just hoping for around a 20% reduction.

Even with insurance, our "share" of that bill was $14,000, but again, he went ballistic, mainly because he was pumped up on prednisone (Even after I warned the doctor that it makes him psychotic), and after calling the billing department every single day for over a month, they wrote off the entire bill.

However, he blamed his entire illness directly on the hospital, and it actually was their fault.

Probably afraid that you were going to sue. Which would have likely been justified.

- - - Updated - - -

I see a lot of people who say they want to be completely debt free. I did that for 8 years and it screwed me over ROYALLY. I had no car payment, no bills other than the typical electric and rent bills, no credit card bills... no misc. debt. I lived by paying cash for everything and I owed no one anything and I was happy with that for the most part. No cash = no item... til the day came I needed a car. Because I lived this way for SO long, my credit was basically "turned off". There was no credit record of my life on file any longer so getting that car was next to impossible. It was like trying to swim through lava to walk away with a car anywhere. I finally found a dealership willing to take me on with the co signature of my mother's (most dealerships wouldn't even accept that) but even then I had a terrible interest rate. I'm ok with debt so long as it's healthy debt.

Just get 1-2 credit cards and pay them off in full each month.