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Re: Jayyy post# 10459

Wednesday, 08/30/2017 3:41:06 PM

Wednesday, August 30, 2017 3:41:06 PM

Post# of 13735
Again, liabilities and bills are two different things. Here is my previous post explaining the difference:

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Liabilities and debts are pretty much the same thing. A bill on the other hand is a payment due at a particular time in the near future.

If I understand your logic correctly, if a company does not have the money to pay its long term debts then it is insolvent, so by this logic any company that takes out a loan is instantly insolvent.

I think this may get the you the Nobel Prize in Economics. Amazing!
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A person making $75,000 per year has $10,000 in the bank and then takes out a $150,000 mortgage, he certainly does not have the money to pay off his mortgage right now. He is however capable of making the monthly payments (ie bills) that might be $1,000 per month.

This person is not insolvent and is in fact doing nicely. As long as he keeps his job he can keep making the monthly mortgage payment.