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Debt Cancellation and How To Achieve It

By: Michael Millington

When debt grows out of hand, it can seem like there’s no way to get rid of it. No matter what debt relief strategy is presented, there is always a detriment attached to it. There can always be a bad side to debt relief that can prevent people from receiving help. However, debt cancellation is a valid way of getting out of debt if you have no other options. There are two main ways to accomplish this: through bankruptcy and through waiting.

Debt Cancellation Through Waiting

This is a tricky topic to handle since it isn’t a widely used (or known) method of debt cancellation. Debts have what is known as a statute of limitations. This is a law that is common to each state of the United States of America. A statute of limitations dictates how long it takes for a certain offense to no longer be pursued in a court of law. In essence, if you have a debt for a certain period of time that goes unpaid, you are no longer legally required to pay it. This also means that you wouldn’t have to worry about legal actions being taken against you by credit providers. Creditors can still look to collect from you through normal means however. Each state has its own statute of limitations to adhere to.

Debt Cancellation Through Bankruptcy

Most people know about this form of debt cancellation. Filing for bankruptcy can help to eliminate unsecured debts in a short amount of time. Bankruptcy can be helpful in that it erases debt, but it can also place a major blemish on your credit record. A bankruptcy filing can remain on your credit record for up to ten years. During this period of time it will be hard to apply for new lines of credit (including auto loans), get an apartment or, in some cases, get a job. Over time, the effect of the bankruptcy filing will diminish, but it is something to keep in mind should you choose to file.