Is There Really Such A Thing As Good Debt And Bad Debt?


Stack of Past Due Bills Lawrenceville GAAccording to a 2017 survey conducted by PrincewaterhouseCoopers, the average U.S. household owes $134,643 in debt. This can cause a great deal of stress for some, but there are some instances when that debt may not be such a bad thing after all. There are two very simple terms for debt; they are good debt and bad debt.

Good Debt

Good debt is considered to be any debt incurred that increases your net worth or has future value. In addition, according to, debt “over a 43% debt-to-income ratio is a red flag to potential lenders.” They also describe examples of good debt as being:

  • Taking out a mortgage
  • Buying things that save you time and money
  • More education
  • Debt Consolidation

Bad Debt

Bad debt is considered to be anything that decreases in value right after you buy it and do not generate long-term income or savings. Bad debts also carry hefty interest rates. Examples of bad debts may include televisions, cars, payday loans, and credit card debt.

It’s almost impossible to live a debt-free life and pay cash for everything, therefore it’s important to make wise purchasing decisions that will require loans.

If you are having serious financial problems due to your debt, you may be considering filing for bankruptcy as a way to get back on track. If you’re at this point, call George R. Belche, Attorney at law. He will discuss your financial situation during your free initial consultation. Contact our law firm today.

George R. Belche, Attorney at Law
189 W Pike St, #103
Lawrenceville, GA 30046
(770) 963-3117