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> in reality, there are many more ways to end up in debt, spending more than you earn is just one possible cause. What are some others that don’t trivially col
by sokoloff 4y ago
> in reality, there are many more ways to end up in debt, spending more than you earn is just one possible cause.
What are some others that don’t trivially collapse into exactly that?
- groestl 4y agoYour bank goes bankrupt and you lose your funds. A good you purchased turns out to be stolen. You lose a lawsuit. You purchased a company in an equity deal and the company turned out to carry liabilities (just a note, I'm not from the US, so details might actually be different there). Likewise, for technical debt: a dependency you relied upon is not maintained anymore. There is an exploit found, or regulation changes, and you realize you used the forbidden pattern everywhere. Basically: earnings minus expenses are the operating result. Concious decisions to accrue technical dept would be the equivalent. But there are costs directly affecting equity as well, which can still result in debt.