The loan on my folks place

Waco Waltz

To get out of credit card debt my Step Dad had to take out a loan on the house. What's owed is 37,000 left to pay. '

My question is what happens when the dollar collapes? Say I have 37,000 in the bank. Does my step Dad just simply continue to pay with those worthless dollars? Or mine if he can no longer put up the money? I am a part owner of the house.

JnRockwall

you will be informed by the bank of what is acceptable payment and it will on you to find the equivilent to what the payment is in the new currency.

i don't want to hijack this thread, but your post reminded of me of something I witnessed today.

yoshmyster

I reckon they can stay there like the squatters who stopped paying their mortage on them upside down homes. Don't know how old your folks are but I wonder if they can do that reverse mortgage thing?

Sounds like they need to buy you out or boot the old man to the curb. Either way you're going to have to pick up the extra burden or take a hit on your credit rating. I for see yalls living together if this don't get fixed.

As for the dollar becoming the "new" Peso just ask what the Mexicans are doing with their cash for the last 50 years.

nmyers

The housing market collapsed; the dollar is going to inflate. Different process at work.

Your stepdad's money & debts are his; your money & debt are yours. Whether or not you bail him out, or just let him default, is a decision you don't need to make now.

His loan is in US dollars; he is obligated to pay back X dollars. It doesn't matter how inflated/deflated the dollars that he uses to pay them back are, it will always be legal tender. Banks & finance companies are aware of this, & take it into account when making any loan; they usually come out ahead.

Neal

nord

One further point...

It would appear that unsecured credit obligations were satisfied by taking out a secured loan. This is something one should seriously study before jumping into a situation which might not be terribly advantageous to a borrower.

One should understand the difference between unsecured and secured credit. This is not to suggest that an unsecured creditor should be ignored as the debt is owed. It is, however, a suggestion that to exchange unsecured credit for secured credit may well place certain property or belongings at risk which normally wouldn't be exposed.

Please understand that this is not legal advice. Rather, it's advice about educating oneself before making a possibly negative decision which could come back to bite somewhere down the road.

hunter86004

In a time of high inflation, it's good to owe money at a fixed rate of interest provided your income/assets have also inflated. As long as your income goes up with the rate of inflation, the debt becomes a smaller percentage of your income.
One reason why during a time of high inflation, people living on fixed incomes suffer. Also the reason some folks who took out variable rate home loans got their butts kicked when inflation pushed interest rates up.

fordsix

chickens will be the new currency[:p]

Waco Waltz

First if things get so bad the loan is at risk, things will be bad enough that I will be seeking refuge back home. My folks place is my SHTF retreat. I'll need a better location and they will need me and some other family in their area. I am talking massive job loss Etc.

My worry is can I pay off the loan during SHTF? I could pay it off now but then I'd have nothing in the bank, no security. Seems like a bad idea and yet if we were to lose the place during SHTF we'd all be hosed.

hunter86004

Pay off now or later might depend on whether your $ is sitting in a bank earning less in interest than what's being paid out as interest on the loan.
Lending a bank money (savings acct) at a low interest rate and, in effect, borrowing it back in the form of a loan at a higher interest rate is not usually a really good idea.
If you have the money to pay off/down the loan and still keep some in savings for emergencies, your choice should be clear.