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Just wondering as so many talk of the problems that are nation is having. Here is my question.
Lets say that you have no consumer debt. Your home is debt free. You don't have any student loan debts. Do you have to worry if the banks fail? Do you have to worry if the sky falls?
It just seems that someone who owes no one would have more protection than someone who owes on a home or some other kind of debt.
Is it possible to still lose a paid off home? If the world falls apart could someone take my home?
No consumer debt
Rent only (don't want to own a home)
No student loan debt
If I did not have to have a checking account for my business I would not have one so no worries if the banks fail. I'll close the business and be done.
As far as taking your home I cannot answer that for you. I would not see any legal reasons why a paid off home can be taken but I'm not expert either.
Short of using a gun, in our state no one can take the house. Same in Florida, which is why OJ and others go there to save what is left of their fortune. OJ, apparently, was smarter than most people because he figured out a way to lose everything, anyway.
While living in Texas, we found out a second mortgage is not even possible - that's an old law, it was explained, that was put in place to protect gambling cowboys' families.
We have 3 paid for homes, in fact. With 2 rented out and no resident turnover in many years, it seems to us that we have built - and are maintaining - a financial fort. At least that's the way we like to think of it.
But if a cataclysmic event happens? Like a mega tidal wave on the east coast, a monstrous gamma wave burst, or Yellowstone's mega volcano erupting there is just no telling what might happen. That Woman and I have about 3 weeks worth of freeze dried foods and 50 gallons of water around here, so if the house is still here then we will be too, for about three weeks.
But seriously, as far as I know most states have laws that protect a homeowner - even if he can no longer pay taxes. But those laws may not apply if your house is falling down around your ears. They may not take it away from you, but they will dang sure tell you to move out.
Hypothetically speaking, one could probably hold-onto a paid-off house, even if they failed to pay taxes. But, suppose one was 'house rich', but, cash-poor and lost their income or had a major healthcare issue that wasn't covered by insurance. One might have a choice between going deep into debt (that they could not pay) or borrowing against one's property, thus, putting a lien against the mortgage.
One might also face a lawsuit that could place a lien against one's home or attach one's home as part of the settlement. Another possibility might include significant damage to a property (fire, storm, flood), leaving the home uninhabitable ... or requiring more of an insurance co-pay than one could afford, without placing a lien threat against the property. ... And these things only address one's home, not one's bank account, pension or other assets that secure their future.
The only way I know of to live in complete security is to "store up treasure in heaven, where moth and rust cannot destroy and thieves cannot break in and steal" -- That alone, not financial or home-security, is the source of "the peace of God that passes all understanding."
In our state if you don't pay your property taxes, you will eventually see the house go up for sale. As long as you pay your property taxes and the insurance premiums, you should be okay for shelter. If the sky falls, the problem will be all your friends, family, and enemies that you will have to fight off from moving in to sponge off of you.
By reducing debt, you reduce your risk and increase your options. Most people will argue that they can afford the payments on a their debt, but the real question is can they afford to pay cash right now for all of their debts? Most people couldn't come close to listing all of their debts off the top of their head. The list would be too long.
By not having debt, you have so much more room in your budget to save and invest. The money that was going to make payments, can now be saved. It is a huge difference. Instead of paying the piper, you are paying yourself to the Max. I say let the banker fend for himself. Your largest monthly payment, should be what you pay to yourself.
My definition of the "sky falling" would be like financial armageddon...and/or government/civil unrest...
The best protection against the sky falling would be paid off everything, no debt, AND LOTS of savings. Without savings I'm not sure being debt-free will protect against "the sky falling." One might even ask if SAVINGS aren't more important than having no debt, or a debt free home.
Even with a paid off house...without savings:
-- a severe illness or disability -- even with health insurance -- could cause debt, and I believe a lien could be placed on the house (whether a sale could be FORCED to debtors could be paid, I guess someone will let us know)
-- a paid off house that's damaged beyond insurance coverage on it could lead to debt
-- call me a conspiracy theorist, but in Greece didn't the government just say on accounts of a certain amount, they were just going to TAKE (or try to take) half of the account. I won't say -- and never would -- that, that couldn't happen here
(I live in a state where they're taxing us for rainfall -- no joke. Oh, that's right, they call it a water runoff assessment that's just BASED on the amount of rainfall on your property. ARRRGHHHH!)
I'd say only the truly wealthy would never have to worry about the "sky falling."
For most people just try to have as much money as you can, and try to insure against as many negatives as reasonable. Sometimes I feel like if I insured against EVERY possibility I'd be spending 500 a month just on insurance which -- I might never need. Do we have to insure against EVERY damned thing in life?
Even for myself, I'm considering long term care insurance. I even looked at flood insurance (and I'm in an area that's NEVER flooded). Thank goodness as I'm with my employer have health insurance, disability coverage, and basic life insurance so that doesn't have to come out of my after tax net take home pay. I feel like I'd have no money left if I got all the insurance for every possibility for for some things I'll just have to rely on savings (self insuring).
Having a problem and owning your house is better that having a problem and NOT owning.
When an adjustment in outlook or practices is called for... it's one more asset in your favor.
The key in all these is the value of the house relative to your other assets (and income).
Moderation.
Just wondering as so many talk of the problems that are nation is having. Here is my question.
Lets say that you have no consumer debt. Your home is debt free. You don't have any student loan debts. Do you have to worry if the banks fail? Do you have to worry if the sky falls?
It just seems that someone who owes no one would have more protection than someone who owes on a home or some other kind of debt.
Is it possible to still lose a paid off home? If the world falls apart could someone take my home?
No it is not paid off, just wondering.
No, they can't take your home if you owe no debt on it. At least not legally now. But the banks can and do have laws changed all the time. So they might be able to change the law and take it even if it is paid off. But they can't as of now.
Actually, in some places you CAN lose your paid-off home... if you are in deep arrears with property taxes.
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