When people think that debt isn't debt.

Muhren

freshcotton wrote: »

The only issue debatable is - what is sensible debt? Am I financially secure? etc etc

Yep I think this is very important, people come to this site and this part of the forum in particular for help and advice to get them out of situations where their debt has become unmanageable.

With that being said I am looking forward to celebrating being debt free once my unsecured debt has been cleared even though I will still have my mortgage to pay. I will then start to post in the MFW section of the forum.

northerner999

Muhren wrote: »

Yep I think this is very important, people come to this site and this part of the forum in particular for help and advice to get them out of situations where their debt has become unmanageable.

With that being said I am looking forward to celebrating being debt free once my unsecured debt has been cleared even though I will still have my mortgage to pay. I will then start to post in the MFW section of the forum.

I do allow myself a wry smile when I read posts about people desperate to "get out of debt" so they can "get a mortgage", while I understand completely and applaud their attitude it is essentially clearing some debt so they can get in debt to a far larger scale and in a way where they are more tied in!

Once I get the last credit card debt cleared I suspect I'll find myself obsessing over reducing the mortgage. Far better attitude than the ones which got most of us into difficulties!

pennystretcher

chester81 wrote: »

- - - Interestingly she arrived at work today in a brand new Renault Scenic Grand which cost about 25K ( I googled it). Apparently she is renting it on a least deal so "it isn't debt". We also know that she and her husband have 30K in unsecured loans that they took out to pay for an extension but "it's not debt as it's improved the value of the house".

Now, I am in no position to criticize anyone's finances and her money is her business but It's interesting how people view their own situations. She is SO judgmental of our debts and yet she is in debt to the tune of 55K!!!

She is burying her head in sand. Unless she has equivalent amount of cash stashed away earning higher interest than the loans, (in which case I would call it financial balancing act) she is deeply in debt.

Mortgage is a debt, albeit different from unsecured loans as if you default on mortgage, the bank will take your house, so the bank has some sort of financial recovery option if you can't pay...

Can't wait to pay off my mortgage as I do not want to owe anyone any money...

Jon_B_2

Look. Most rational thinking people understand that their mortgage is a debt.

However, there are two types of debt. That which is secured against an asset e.g. a house or car and that of which is unsecured.

If you have £50k outstanding on credit cards to fund holidays, clothing, gambling etc these are largely intangible assets and can not be sold off to recoup the debt owed.

MOST people have a mortgage against an asset that basically over the course of the term will appreciate and as such if things got really bad for the owner, they could sell up and settle their mortgage debt free.

Cars are a little bit more tricky as they depreciate somewhat, but there is still an asset.

To put my neck on the line i'd rather have £15k of debt against a car currently worth £6k than £10k on credit cards.