Like many, the amount of debt that I am carrying is too high for me to expect that I can be "debt free" by the onset of Y2K. I can and will prepare to ride out a 2-3 month period, but what about the longer term? Will my debt burden eventually "evaporate" if systems and economies do go down big time, as predicted? Or will my debt burden pull me down into the morass? Thanks for your advice on possible strategies.

-- Stephen Johnson (sjohnson@ap-tc.com), September 08, 1998

Answers

Consider your moral responsibility first, then your financial (long term) responsilities.

I don't plan on paying off "everybody" but do plan on sending all my regular creditors (gas, gasoline, phone, house, water, car, Sears, Home Depot, VISA, etc.) either the minimal or their "regular" amount in January and February 2000 by check in snail mail return receipted.. If the checks get there great, if they don't, its in the US mail, and i can prove it. (So many other things may be going so wrong I figure massive repossessions won't occur. Remember, few people will be prepared (based on experience) so few will even be paying bills).

If each company can't process bills, or processes them wrong, then it will up to that company to show me (and I have the paper trail (trial ?) to show what was sent when.

So I see little reason to pay down everything, other than the 18% pay raise of no interest.

-- Robert A. Cook, P.E. (cook.r@csaatl.com), September 08, 1998.

This reminds me of the old story - if I owe you $20 and can't pay, I'm in trouble; if I owe you $1,000,000 and can't pay, you're in trouble. This is why many people are concerned about banks in 2000 - big banks may be fully Y2k compliant in all their systems, but if many of their borrowers can't pay, because their employers have gone out of business, or because the Post Office isn't working, or power is out in sections of the country, or the bank your money is in isn't functioning to be able to clear your check, the bank holding your mortgage is in big trouble. <<<<<<<<<<>>>>>>>>>>..

-- Dan Hunt (dhunt@hostscorp.com), September 08, 1998.

As for whether or not your debt will evaporate, that will all depend on how bad things get and how the government responds.

As for the "morality" of paying debts, here is something to consider. When the big banks get into trouble with their foreign loans they get bailed out by Congress. When the average Joe gets into trouble with those same banks then he is supposed to break his back to meet his "obligations". I say do what you can but don't compromise any survival plans.

-- Joe O (jowczar@comp.uark.edu), September 09, 1998.

As a mortgage broker, I can tell you that most mortgage companies will not forget about your debt. You can be sure that what ever happens on 01/01/00, your mortgage will still be floating in the securities industry somewhere. The big question is, if you can't make the payments (no mail, no elec. trans.) how will your mortgage get credited. If unemployment jumps to 30%, forclosures will skyrocket. It would take years to sort out that mess. Debt free is still the best way to live, but if you can't be sure to have some savings to try and pay the minimums. Or you can say, f--- it!,and run up the cards, get a 135 on your home, buy an RV,food,silver and guns and head for the hills when the sh-- hits the fan!

-- Bill (bill@mailexcite.com), September 12, 1998.