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I asked my BIL this a while ago, he is a loan officer. He said that the law says they can't discriminate. In many cases, the house is the only asset in the estate.
Lenders discriminate all the time based on financial fitness. It is their job to. Why wouldn't they?
I would hope my estate would more than pay off any debt I had incurred . . . I can't wrap my head around folks who would run up debt with the intention of never paying it. There is no excuse for that type of behavior. I can understand if folks have medical problems that impact their savings and assets. That is the only reason I could see for incurring debt after retirement.
I would hope my estate would more than pay off any debt I had incurred . . . I can't wrap my head around folks who would run up debt with the intention of never paying it. There is no excuse for that type of behavior. I can understand if folks have medical problems that impact their savings and assets. That is the only reason I could see for incurring debt after retirement.
One of the biggest debts is student loans. There are many who will be dying still owing. Especially those who got degrees later in life. Someone I know went to grad school for a master's degree at age 55 and spent four years getting it, all on student loans. She already owed for a 4-year pricey private college. She hasn't gotten a job at age 60 and probably has the loans on hold. The odds of paying back are....??? I wonder how widespread this scenario can be.
One of the biggest debts is student loans. There are many who will be dying still owing. Especially those who got degrees later in life. Someone I know went to grad school for a master's degree at age 55 and spent four years getting it, all on student loans. She already owed for a 4-year pricey private college. She hasn't gotten a job at age 60 and probably has the loans on hold. The odds of paying back are....??? I wonder how widespread this scenario can be.
I don't know, but I did see some stats on that subject within the last few years. I think the info is out there somewhere, broken down by age groups as to how much, collectively, is owed in student loans (at least, government backed loans).
You can't dodge them forever . . . they will withhold from your tax returns, I read somewhere . . . They do allow a deferral for a while (if you have applied for a hardship extension of payment period or some such technicality) but you can't defer them forever. I thought they offered deferral while out of work, for example, but I think that is capped - maybe at 18-24 months or so.
They may be able to even garnish Social Security. I honestly do not know. That would be something interesting to find out.
ETA: I question whether or not Boomers would have a bunch of student debt. ???? We were, for the most part, in a big hurry to get our degrees, so most folks were finished even with their MAs by 40 (anyway, the folks I know). Now, my hubby didn't get his Ph.D. til 50ish, and we are still paying on one of his student loans, but we could pay it in full out of savings if we wanted to (it will be paid off in a matter of months).
And - many in our generation used the GI Bill after returning from Viet Nam. So . . . I have my doubts how many Boomers have significant student loans they are still paying on. Maybe for their kids . . . ?
Last edited by brokensky; 08-13-2013 at 08:25 AM..
I know someone who took $125,000 as home equity line of credit and spent all of it on traveling and living expenses.
He stopped working at age 51.
I'm pretty sure he does not intend to pay it back. He is presently age 60 and pays just $215 (interest) per month on it. He took the home equity line of credit when he was 52. It comes due in full in 20 yrs at his age 72.
He mentioned just refinancing the loan (home equity line of credit) again when he is 72 - in other words, getting the loan extended again so it is not due in full. The only hitch he figures is if they will somehow not refinance the loan and extend it, but he is pretty certain they will.
I thought it was unethical not to pay back this money, but maybe some of you can fill me in if you think it is not unethical.
Considering the morality of the present age the article shouldn't surprise us. Screw everyone else, lets others pay my bills or take the loses, as long as I get mine. This reminds me of a guy who borrowed $40,000 from a mortgage Co. on a second mortgage, but openly refused to make payments and said he had no intention of ever paying a penny of it back.
I know someone who took $125,000 as home equity line of credit and spent all of it on traveling and living expenses.
He stopped working at age 51.
I'm pretty sure he does not intend to pay it back. He is presently age 60 and pays just $215 (interest) per month on it. He took the home equity line of credit when he was 52. It comes due in full in 20 yrs at his age 72.
He mentioned just refinancing the loan (home equity line of credit) again when he is 72 - in other words, getting the loan extended again so it is not due in full. The only hitch he figures is if they will somehow not refinance the loan and extend it, but he is pretty certain they will.
I thought it was unethical not to pay back this money, but maybe some of you can fill me in if you think it is not unethical.
Well, if he sells his house, he will have to pay off the first and second lien . . . so it would be paid back then. And he must have enough equity in his house for the lender to feel if they had to even foreclose, they would get their piece of the pie. So if he manages to "refinance" the balance and dies -- there must be enough equity in the house to pay everyone back. Doesn't seem like anything would be wrong with that.
Now, if he plans on going bankrupt and having the house go into foreclosure (and no equity in it) . . . that would seem lousy to me!
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