Will debts be wiped out in SHTF or economic collapse?



There is a popular belief among a lot of preppers that in an economic collapse there will be a wiping out of any and all debts, and everybody will be able to start free from a clean slate. Some preppers even seem to be looking forward to ‘shtf’ just for this reason, and don’t bother avoiding debts, or even paying them down, because they think it won’t matter and it will all disappear in a few years.

I think this is a dangerous mindset for a couple of reasons:

1. It probably isn’t going to happen.

In all but the most serious SHTF scenarios, the debt holders will do everything in their power to be able to collect. Even in the event of a Weimar-like inflation scenario, I wouldn’t be surprised if the government (at the behest of the too-big-to-fail banks) simply switched to a new currency and transferred your debts to this new currency. So instead of becoming super easy to pay off, your 10,000 debt is now 10,000 ‘Ameros’ or whatever new revalued currency they come up with, making your debt even BIGGER than it was in nominal terms, not less. If don’t think the banks and governments are capable of such treachery, you need look no further than the ‘bail-ins’ that have taken place in Europe where money has literally been taken directly from depositors accounts to bail out the banks. If they are capable of that kind of blatant thievery, there is no end to what they will do to maintain power.

If there is an deflationary collapse, then your debts will become harder to pay off automatically, without any intervention from the banks needed. The dollar amount of your debts will stay the same, but wages and the value of everything you own will decrease. Not a good situation for debt holders.

There is the possibility of a SHTF event so severe that it causes an almost complete societal collapse, in which case debt will be functionally erased, as there won’t even be markets, records, or even electricity. But in such an extreme situation the benefit of your lack of debt will pale in comparison to the nightmare that would be day to day life in such a “Mad Max” scenario. It is ridiculous to wish for such a horrible scenario simply because you would get a clean slate of debt, because EVERYTHING else about life would get unimaginably worse.

Luckily I think such an extreme societal collapse scenario is very unlikely, and so it doesn’t make sense to run up debts in anticipation, as it will most likely just bankrupt you in the meantime and make your life miserable.

The bottom line is that the entire point of prepping should be to make free from systems of support. Debt can be used advantageously in certain situations, but being mired in consumer debts to the point where your net worth is negative is being a slave to big banks and prevents you from being totally self-sufficient. For this reason alone it is best to avoid debts and try to pay off ay that you have BEFORE any SHTF scenarios.


The Lord Humungus
The Lord Humungus rules The Wasteland

3 thoughts on “Will debts be wiped out in SHTF or economic collapse?

  1. Important to remember this. You can’t focus responsibility in one part of your life and let debt take over the other. Debt ultimately can lead up to the rights over your life (prison) and like TLH said, if we get to a situation where debt is wiped, it likely won’t be a world we’ll want to live in.

  2. I just found your site thru youtube & put it in my Favorites….I like the info you give, thank you, but your picture, well, kind of frightening because it makes me think of the ISIS murderer you know, how he points at the camera with his knife..
    anyway I’m wondering as far as paying down debt goes. We are in very bad shape financially due to the economy here & also my husband’s health. Out of fear of losing our house which has a mortgage on it, I have managed to put away in c hecking enough money for 6 payments. I first try to pay from bill money, so far that has worked so I still have those 6 months of payments for a cushion. My worry is if the economy collapses, these days I’m reading the American dollar could collapse on September 13th of 2015-well that money will be gone right? What am I supposed to do? This mortgage is actually set up as a line of credit. Because that is what we had & ended up owing about $80,000.00. They did not renew the line of credit because of our money troubles, but made it into a regular loan we pay on every month. But the statement still shows it is a line of credit, we just can’t draw any money of course. What do you suggest? I’m pretty sure if I were to take all that money & give it to the bank toward those payments I would still get a bill starting next month I have to pay just like before…in other words I don’t think I”d not be billed for 6 months, that would just pay down the principal. Which would be good, except we cannot afford to do that. We are very bad off financially. So what to do? If all collapses September 13th, is all that saved gone also?
    Thank you.

  3. Debt is slavery, it’s anti-liberty. By indebting yourself you make the banks richer and the same banks are the ones propping up the governments wreckless spending for things they use against it’s own (serfs) citizens. As a customer to the bank you are indirectly helping the NSA spying program, a drone, the IRS, etc. for example. Finding ways to stay debt free and NOT prop up the corrupt system is better if you can do so. It is good for freedom and just downright always better for the individual’s financial well being.

Leave a Reply to the silver contrarian Cancel reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>