How to Get Rid of Debt Without Paying: Is it Possible? (2024)

Home > Bankruptcy > How Can You Get Out of Credit Card Debt Without Paying?

Paying credit card bills can feel like fighting a fire. You put out one flame and another pops up. Eventually, you just want to get away from the flames.

A lot of people think the best way is by filing bankruptcy, mainly because they can escape without paying their bills.

But can you really get rid of credit card debt without paying?

Technically, the answer is yes. You can.

Realistically, the answer is no. You can’t.

Let’s deal with the “technical” answer, which I must say we do not recommend.

Technically, you could stop paying your credit card bill and hope the statute of limitations in your state expires before the card company, or more likely a debt collection agency, catches up to you.

The problem there is the statute of limitations is somewhere between four and six years in most states. Your creditors could take you to court for non-payment in that time and you likely would lose.

That would mean a court judgement against you for the amount owed, court costs, possibly attorney fees and maybe interest or late payment fees and … well, you get the picture. Try this at your own risk. It may end up being a mistake you should avoid when paying debt, and again, we don’t advocate you try.

Now, back to reality. No, you really can’t get rid of credit card debt without paying.

Filing bankruptcy for credit card debt will indeed lets you escape credit card debt. But if you’re asking, “How can I get rid of credit card debt without paying anything to anybody?” the answer is still: You can’t!

Well, you could if you dropped dead. But even then, credit card companies are entitled to at least partial repayment from your estate.

Bankruptcy also devastates your credit rating and stays on your credit report for 7-10 years for future lenders to look at. That means you’ll eventually pay more – sometimes a lot more – if you want to borrow money to buy a car or a house.

The fact is a basic economic law applies to escaping debt – There is no free lunch. You can’t get something for nothing.

But if you’re disappointed to learn there is no free bankruptcy, take heart. The costs can be viewed as a down payment on a fresh start that will turn your life around.

There were 772,646 bankruptcy filings in the 12-month period ending March 31, 2019, according to theAdministrative Office of the U.S. Courts. Bankruptcy has been a good option for millions of people, some of whom you’d never expect to be broke.

Did you know Walt Disney filed for bankruptcy? So did Elton John, Willie Nelson and Abraham Lincoln.

Lincoln didn’t technically file because modern bankruptcy didn’t exist in the 1830s. But after the general store he ran in Salem, Illinois, went into debt, Lincoln was required to repay creditors over 17 years.

You’d have plenty of company if you decide to file. But you need to be aware of the financial consequences and how to minimize them.

Are There Options Besides Bankruptcy?

Yes, but they’re definitely not free.

One route is debt settlement. You hire a lawyer or debt-settlement company to negotiate with creditors in an effort to pay less than what you owe, presumably considerably less. You make one lump-sum payment and are done with it.

That sounds good, but there are serious drawbacks.

For openers, some companies won’t even consider debt settlement and there is no law forcing any company to settle your debt.

If they will negotiate, you’re still going to pay part of your debt. The advertisers say you may only have to pay pennies on the dollar, but better you should count on quarter on the dollar. Like three of them, as in pay 75% of what you owe.

On top of that, the debt settlement company will charge you 15% to 25% of the amount saved. And the government will tax that as income on your next tax return.

The process could take as long as three years. Your credit score is destroyed.

But at least you’re not dead.

Another option is a debt management plan. A nonprofit company consolidates your bills and negotiates lower interest rates with creditors. You make one monthly payment that is lower than the combined payments you were making.

It’s a better option than debt settlement, but the debt management company also charges a fee, the process takes three to five years and you pay your credit card bill in full.

That brings us back to bankruptcy.

Which Is Better, Chapter 7 or Chapter 13?

If you want to pay the least to creditors and lawyers, Chapter 7 bankruptcy is probably your best option. In that, the court appoints a trustee to sell your non-essential assets and distribute the net proceeds to creditors.

With Chapter 13 bankruptcy, you offer the court a plan to repay your debts in three to five years. With either plan, you’ll probably pay something back to credit card companies. It will just be less than the original amount.

Filing fees are usually $335 for Chapter 7 and $310 for Chapter 13. The advantages of Chapter 7 are you’ll be off the hook a lot sooner and overall bankruptcy costs are likely to be much lower.

You don’t have to have a lawyer for either proceeding, but bankruptcy laws and proceedings can get complicated, so it’s advisable.

The average attorney fee for Chapter 7 is $1,250, though that varies by market. The average fee for Chapter 13 is $3,000, but that also varies.

What Are the Downsides of Bankruptcy?

It’s an anvil on your credit score.

If you’re considering bankruptcy, chances are your score has already nosedived. But if it’s still in the “good” range of 700, it could drop 100 to 200 points.

Why does that matter?

Your credit score is a major factor in determining the interest rate you receive when you apply for a loan. The better the score, the lower the rate, the less you pay.

For example, say you want a 30-year fixed loan on a $200,000 mortgage. A credit score of 700 would qualify for an interest rate of 4.392%. A score of 620 would get 5.759%.

The first one means your monthly payment would be $1,001. The second one would translate to a $1,168 payment.

Over 30 years, that lower credit score would mean you’d pay almost $70,000 more in interest charges.

The bottom line isbankruptcy is not aGet Out of Debt Free card. There is no such card.

But if all those credit card bills make you feel like you’re trapped in a burning house, bankruptcy is the quickest and cheapest way out.

Just remember, it could keep you from owning a real house for a long time.

How to Get Rid of Debt Without Paying: Is it Possible? (2024)


How to Get Rid of Debt Without Paying: Is it Possible? ›

Bankruptcy is your best option for getting rid of debt without paying.

Can you get rid of debt without paying? ›

You may be able to get out of debt without paying based on factors like your total debt, type of debt and income. Several programs are available to help forgive student loan debt, such as income-driven repayment plans, Public Service Loan Forgiveness, and Perkins Loan Cancellation.

Is it possible to escape from debt? ›

If your debts are overdue the creditor may be willing to negotiate with you. They might even agree to accept less than what you owe. Sometimes it's possible to work out an agreement so your debt is eliminated and debt collectors can't sue you for the debt.

What is the best way to get rid of debt? ›

How to get out of debt
  1. List out your debt details.
  2. Adjust your budget.
  3. Try the debt snowball or avalanche method.
  4. Submit more than the minimum payment.
  5. Cut down interest by making biweekly payments.
  6. Attempt to negotiate and settle for less than you owe.
  7. Consider consolidating and refinancing your debt.
Mar 18, 2024

How do I get rid of $30 K in credit card debt? ›

How to Get Rid of $30k in Credit Card Debt
  1. Make a list of all your credit card debts.
  2. Make a budget.
  3. Create a strategy to pay down debt.
  4. Pay more than your minimum payment whenever possible.
  5. Set goals and timeline for repayment.
  6. Consolidate your debt.
  7. Implement a debt management plan.
Aug 4, 2023

Does the government offer debt relief? ›

Unfortunately, there is no such thing as a government-sponsored program for credit card debt relief. In fact, if you receive a solicitation that touts a government program to get you out of debt, you may want to think twice about working with that company.

How do I ask for credit card forgiveness? ›

Negotiating With Credit Card Companies

To do this, you'll need to have a lump-sum amount to offer your creditor. Once your credit card issuer agrees, get the agreement in writing to make sure both sides understand the terms. Keep in mind that your lender is not obligated to settle any amount of your debt.

How can I get out of debt with no money and bad credit? ›

How to get out of debt when you have no money
  1. Step 1: Stop taking on new debt. ...
  2. Step 2: Determine how much you owe. ...
  3. Step 3: Create a budget. ...
  4. Step 4: Pay off the smallest debts first. ...
  5. Step 5: Start tackling larger debts. ...
  6. Step 6: Look for ways to earn extra money. ...
  7. Step 7: Boost your credit scores.
Dec 5, 2023

What debt Cannot be erased? ›

Filing for Chapter 7 bankruptcy eliminates credit card debt, medical bills and unsecured loans; however, there are some debts that cannot be discharged. Those debts include child support, spousal support obligations, student loans, judgments for damages resulting from drunk driving accidents, and most unpaid taxes.

Is the National debt relief Program legit? ›

National Debt Relief is a legitimate company providing debt relief services. The company was founded in 2009 and is a member of the American Association for Debt Resolution (AADR). It's certified by the International Association of Professional Debt Arbitrators (IAPDA), and is accredited by the BBB.

What is the debt forgiveness program? ›

Borrowers with undergraduate debt would qualify for forgiveness if they entered repayment 20 years ago or more, and borrowers with graduate school debt would qualify for forgiveness if they entered repayment 25 years ago or more. Cancel student debt for borrowers previously enrolled in low-financial-value programs.

What is a debt relief program? ›

Debt relief or settlement companies are companies that say they can renegotiate, settle, or in some way change the terms of a person's debt to a creditor or debt collector.

How to pay $30,000 debt in one year? ›

The 6-step method that helped this 34-year-old pay off $30,000 of credit card debt in 1 year
  1. Step 1: Survey the land. ...
  2. Step 2: Limit and leverage. ...
  3. Step 3: Automate your minimum payments. ...
  4. Step 4: Yes, you must pay extra and often. ...
  5. Step 5: Evaluate the plan often. ...
  6. Step 6: Ramp-up when you 're ready.

How long will it take to pay off $20000 in credit card debt? ›

It will take 47 months to pay off $20,000 with payments of $600 per month, assuming the average credit card APR of around 18%. The time it takes to repay a balance depends on how often you make payments, how big your payments are and what the interest rate charged by the lender is.

How do you get out of debt when you are broke? ›

Consider paying down your credit cards with the highest interest rates first or paying off your smallest debt first. Look for ways to reduce your expenses and put the money you save toward your debt. Student loan forgiveness programs and income-based repayment programs can help with student loans.

How can I pay off my debt fast with low income? ›

To pay off debt quickly, focus on increasing your payments, starting with high-interest debts first, while minimizing new debt. Utilize strategies like the debt snowball or debt avalanche, and consider consolidating debt for lower interest rates if feasible.

What happens after 7 years of not paying debt? ›

The debt will likely fall off of your credit report after seven years. In some states, the statute of limitations could last longer, so make a note of the start date as soon as you can.

What happens if you never pay debt? ›

If you don't pay the debt, the lender has a few options: The lender can try to collect the money from you themselves. The lender can hire a debt collection agency to help them get the money. The lender can write off the debt and sell it to a debt collection agency.

How do I get rid of debt collectors without paying? ›

You can sue the debt collector for violating the FDCPA. If you sue under the FDCPA and win, the debt collector must generally pay your attorney's fees and may also have to pay you damages. If you're having trouble with debt collection, you can submit a complaint with the CFPB.

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