What is debt? Our ComArt educates you on the difference between good debts and bad debts. An example of good debt is having all monthly payments up-to-date while paying off an asset which is increasing in value. Bad debt is generally any long term commitment that you finance due to lack of existing funds at the time, instead of paying cash for it. Generally it means, owning cars you cannot afford, paying off credit cards and extravagant holidays over long periods.