As all of you know, that we all have a net worth, that is the sum total of all our financial assets minus all of our liabilities. We usually think of net worth more in terms of a value, but we can also use the term net worth when referring to our assets, which include our houses and cars, so we know that we have a positive net worth.
Net worth is the sum total of our assets minus all liabilities. So if you spent $500 to buy your car, and you still owe $100 on your car loan, you are still a net-worth owner. The problem is that you can have more than you have.
We’ve all been there before. A guy buys a house and he still owes the bank 30,000 on his credit card. That’s a net-worth problem, but a more common one is a seller who has to pay a lot more for the house than the original price indicates. There is also a term for sellers who are really hurting now that they can’t afford to pay the asking price. We call them debtors.
A debtors problem is nothing to be afraid of. Even though you currently owe a lot of money on your credit cards it is an opportunity to get out from under. The lenders dont care if you have a good credit score. They care more about the amount of debt you have.
Many of us have been on the fence over debtors. They are hard to find. The only way to get rid of them is to buy a new house and then sell it.
That is a pretty harsh way to put it. The truth is that many people simply have no credit history on their credit report. In fact, about two-thirds of Americans can’t even get a credit score of 600. That is because, in the eyes of the credit industry, people with a bad credit score are essentially debtors who need to pay their debts. They are being denied access to credit.
That’s right, folks. It’s not just people that have bad credit, it’s a lot of people. According to the Federal Reserve, the debt crisis is due to a lack of credit. In reality, we are all responsible for our own credit. Credit is very easy to obtain and it can give you a great amount of leverage, especially if you have a great credit score. If you don’t have a credit score, you are the one that needs to pay every bill on time.
It seems that, contrary to popular belief, credit isnt all bad. The Federal Reserve is not the only agency that tries to help out people who are struggling with credit. Many states, companies, and even whole industries have programs that try to help people who are on the verge of bankruptcy. The government is even involved in improving credit scores and improving credit for people who are in immediate financial danger.
Sure, people can go out of their way to pay for things on time, but it’s not necessary. In fact, people who have trouble paying their bills may be better off simply ignoring them. If you know you will be out of a job or going bankrupt because you can’t afford the rent or your car got repossessed, you don’t want to make a deal with the devil. In short, pay your bills on time.
Its also a policy of the government to make sure the banks, credit card companies, and other companies that collect your social security number will only do so to the extent that they are required to do so by law. That means they don’t collect it but they are required to do so and there is no way around this.
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