Is It Possible To Get Out Of Debt Without Paying?
Should you respond to low-interest loan offers from Credit 9 and trust that they are the best way to get out of debt without paying? I don’t think so!
If you have been thinking about it and you just received a “too good to be true” loan offer in the mail from Credit 9, Tripoint Lending, or Simple Path Financial or – listen to your gut instinct. Do you really think you qualify for a 3% interest rate? Do you really think that reservation code is especially for you? Check Crixeo and find out the truth.
According to the Federal Reserve Bank of New York, household debt is higher than ever. It’s now more than $14 trillion. Regardless of your financial status, you are in debt. However, there are plenty of us who are suffering a lot more than the top earners in the US. However, if you want to get out of debt without paying, the situation isn’t hopeless. You can still try some options.
The best part is, you don’t have to pay all the time. If you have already compared credit card refinancing vs debt consolidation to get a personal loan for debt consolidation or an accelerated debt pay off plan like the debt avalanche method, it may be time to look at other options.
Getting out of Student Loan Debt
If you are a student and you want to get out of debt without paying, you can from a lot of options. It depends on the loan that you have, the job that you’re currently working in and the school you’ve attended. Here are just a few options you can use to get out of debt without paying.
This option allows you to revise your monthly payment to 10-20% of your income. Depending on the plan, this can be for 20-25 years. The remaining loan balance is forgiven afterwards.
Public Service Loan Forgiveness
For those that work in the public sector, this can be a great way to get out of debt without paying. If you’re an employee at the federal, state, or local level, you can qualify for it. If you work at a nonprofit organization, you may also be eligible. However, it does require you to make 120 qualifying payments first, while working for a qualifying employer. The best part is that the rest of the direct loans will be forgiven.
Teacher Loan Forgiveness
This type of loan forgiveness is open to teachers that have worked for five consecutive years at low income schools. These schools can either be elementary or secondary level. Teachers that work at an educational service agency may also qualify. The total amount that can be forgiven through this is $17,500 of Direct or Stafford Loans.
Perkins Loan Cancellation
This type of program applies to various public servants. For example, teachers, law enforcement officers, firefighters, etc., can be eligible for this loan cancellation. This can happen over the course of 5 years.
Closed School Discharge
If the school closed during your time attending or just after withdrawal, you can get your federal student loans discharged.
In the event of death, permanent disability, or even in the case of bankruptcy, you could get your loans discharged.
Getting Out of Credit Card Debt Without Payment
You do have a lot of options to get out of debt without paying when it comes to unpaid credit card debt. You can look for the best way to consolidate credit card debt. However, you need to consider the repercussions of these options. If you have already been denied a balance transfer request which is generally the best way to consolidate debt, it may be time to look at other options.
- If you simply stop paying your credit card bill, it will turn into collections. Your credit score will ultimately tank, as a result. However, there is a statute of limitations on debt collection. You could wait for that to expire. Know that the period could be about 3-10 years. This gives your debt collectors plenty of time to sue you for skipping payments. You will be liable for them later. You also don’t stand a chance to win the case if you’re sued for nonpayment of debt.
- Debt settlement is another way to get out of debt without paying. You can settle your debt with the current lender through another agency. This will reduce the total amount of debt that you have to pay. Hence, you won’t get a clean chit, but you will get enough time to pay off some of the debt.
This was always going to be on this list. Bankruptcy is one of the most common ways to get out of debt without paying. However, you should know that this doesn’t qualify as a first resort. You shouldn’t be considering this unless you have no other options. Filing for bankruptcy sounds like you’re starting over. However, depending on the route you take after, you will still be accountable for a little of your debt.
Bankruptcy involves selling off some of your old assets so that your debt is paid off. This is contained in Chapter 7 of bankruptcy filing. Depending on how high the debt is, this could include your personal property, your home, and your existing bank assets. After a few months of filing for bankruptcy, any of your remaining debt could be discharged.
Chapter 13 filing is another story. You are set up on a court-ordered repayment plan. Thereafter, any remaining debt will be discharged. However, this alternative to get out of debt without paying could take years. The process means that you’ll spend longer paying off your debt and you’ll have a bankruptcy filing on your credit report as well. That won’t help your score.
Hence, depending on the type of bankruptcy you file for, your credit report could suffer for up to 10 years. This is why filing for bankruptcy is
- A last resort
- Something that you should be very careful opting for.
You should weigh all your options before you go for this route.
The potential advantages of bankruptcy are that debt collectors can’t collect a debt that was discharged in bankruptcy. They can’t continue collection activity during the pending of the case either. However, the filing itself has a huge effect on your credit rating and your financial health won’t ever be the same.
Just remember that in the end, not paying off debt never works in the long run. You can try to get out of debt without paying through any of these alternatives, but you will have to pay something.
Not paying your bills hurts your credit score. Taking on too much debt creates a feeling of mistrust between you and the banks and any lenders. Even taking some of the ways to get out of debt without paying listed here will damage your financial health. So live your life the way that makes it financially sound.