Being broke is like driving with an almost empty fuel tank. And carrying debt is like having to drive through a toll booth demanding payment before you can refuel.

It can feel as if you're on a never-ending road of financial struggle.

If it's any consolation, you're not alone; and with the right roadmap, countless others have escaped debt's clutches and driven themselves toward financial freedom.

Here's how to pay off debt with no money.

Nonprofit counseling

Are you using the term "broke" to describe a situation where you've depleted your funds on non-essential purchases? True financial scarcity may not be the issue if that's the case.

If you are overspent, you can change your spending habits to create extra room in your budget.

But, if you genuinely lack funds, it's crucial to avoid exacerbating the situation by making unwise choices, such as splurging on unnecessary items.

This is where nonprofit debt counseling can help. It is a safe and affordable option that aims to get you out of debt without going bankrupt.

Nonprofit debt counselors consolidate your debt and negotiate with your creditors to reduce interest fees, then design a payment plan and schedule that fits your budget.

Learning how to get out of debt when you are broke involves reducing debt and cultivating healthier financial habits. As part of the counseling program, you'll receive ongoing guidance to budget within your means, manage debt, and save for the future.

Debt counseling can provide a valuable solution if you face multiple life challenges, such as unemployment, daunting bills, and desperately needed expert financial guidance.

On the flip side, if you have a steady income but are struggling because many high-interest debts are leaving you broke, debt consolidation might be a better fit.

Debt consolidation

If you have a good relationship with your creditors and a history of making on-time payments, you may be a suitable candidate for debt consolidation.

It involves merging all your debts into a single loan with either a reduced interest rate, lowered monthly repayments, or both. Rather than managing multiple payments, you'll only need to handle one, ideally lower, payment.

But, before committing, you should compare interest rates and fees from different lenders to ensure you can afford the new monthly payments.

As with any financial commitment, read the fine print carefully. Understand all the terms and conditions, including fees and early repayment penalties.

If you don't qualify for debt consolidation or the reduced interest expense doesn't change your bottom line, there are other options, for example, debt settlement or bankruptcy.

Debt settlement

The next option is debt settlement - a process where a debt relief company negotiates with your creditors on your behalf to pay a lump sum that is less than the total debt owed.

The catch: The debt settlement company will request you deposit funds into an escrow account until it accumulates enough money to fulfill the agreed-upon amount.

This method comes at a price. It can negatively impact your credit score and you will pay a fee based on a percentage of the money saved on your resolved debt, typically between 15% and 20%.

Even so, debt settlement could provide faster resolution compared to regular monthly payments. Once the debt settlement company and your creditors agree and you pay the lump sum, the debt is settled.


Bankruptcy gets a bad rap. Many think it is a sign of financial failure or mismanagement. In reality, it is a legitimate option if you are broke and facing crippling debt.

There are two types of bankruptcy:

  • Chapter 7 bankruptcy eliminates debt such as credit card balances, medical expenses, and personal loans. It won't eradicate student loans, tax obligations, alimony, or child support payments.
  • Chapter 13 bankruptcy involves creating a repayment plan to repay creditors over three to five years. It's suitable if you have a steady income and want to catch up on missed payments while retaining valuable assets.

As a legal process, bankruptcy provides a structured way to seek relief from creditors and, in some cases, obtain a fresh start. But, it can negatively affect your credit score, your ability to get certain loans, rent housing, or secure certain types of employment.

Filing for bankruptcy is complicated and the entire process can take several months. Hiring an attorney to navigate the specific requirements of the bankruptcy process in your state is recommended.

Legal aid organizations provide free or low-cost legal services if you can't afford an attorney. Find a legal aid organization in your area by searching online or calling the National Legal Aid Hotline at 1-800-656-4673.

Financial advisor

Financial advisors will help you formulate a comprehensive, long-term strategy to reach your financial objectives. While debt reduction is a crucial component, their role extends beyond that.

For example, consider a scenario where you're managing medical debt, credit card balances, and a mortgage. A financial advisor will likely recommend paying off high-interest debts first, so you can start an emergency fund.

After settling your medical and credit card bills, they might propose opening a retirement savings account or increasing contributions to an existing one while managing your mortgage payments.

By understanding your aspirations and requirements, advisors curate a holistic plan encompassing debt reduction, insurance, savings, and investment tactics.

Financial advisors have diverse fee structures, including commission-based, hourly rates, flat fees, retainers, and performance-based models. Be sure to inquire about payment options before enlisting their services.

Seek professional help

To learn more about managing debt, you can visit government websites, such as the Consumer Financial Protection Bureau (CFPB) and the National Foundation for Credit Counseling (NFCC).

Trust your instincts and be wary of advice that seems too good to be true, especially from debt relief companies. Some are scams, while others, like Freedom Debt Relief, are legitimate.

Remember, any professional organization or financial professional offering to help should provide transparency about their services, costs, and outcomes so you can make informed decisions about how to get out of debt with no money.