How the Do Nothing Strategy Puts You Further in Debt

The ‘Do Nothing Strategy’ is an intriguing concept that has gained prominence among individuals grappling with financial difficulties. The strategy, as the name suggests, involves ignoring debt collection efforts when faced with insufficient funds to keep up with payments. However, the question arises: is this approach effective, or does it simply push you further into the abyss of debt? Through this article, we’ll delve into the intricacies of this strategy and its implications on your financial health.

Understanding the ‘Do Nothing Strategy’

The ‘Do Nothing Strategy’ comes into play when individuals, unable to fulfill their debt obligations, choose to ignore their creditors’ collection efforts. This approach banks on the concept of being ‘creditor-proof,’ meaning that though the individual may continue to receive demands for payment, there is little scope for creditors to pursue them aggressively due to their inability to pay.

When Does the ‘Do Nothing Strategy’ Seem Viable?

This strategy may appear viable under certain circumstances, such as:

  1. No income or assets: If you have no income or assets that your creditors can lay claim to, you can effectively employ the ‘Do Nothing Strategy.’ As you have no wages to garnish, creditors cannot easily enforce payment, especially if you’re unemployed or retired on a minimal pension.
  2. Tolerance for constant calls: This approach requires the ability to endure persistent calls from creditors and collection agencies. The calls will continue in hopes of a change in your circumstances or to pressure you into making some form of payment.

However, the ‘Do Nothing Strategy’ should not be seen as a permanent solution but rather a temporary one until your financial situation improves.

The Implications of the ‘Do Nothing Strategy’

Choosing not to address your debt situation has its repercussions. Some of the potential consequences include:

  1. Persistent calls from creditors: As mentioned before, choosing to ignore your debt does not make it disappear. Creditors are likely to continue their collection efforts, which can be stressful.
  2. Garnishment of future earnings: Once your financial situation improves, and you start earning again, creditors may initiate proceedings to garnish your wages.
  3. Accumulation of debt: Your debts won’t magically disappear if you choose to ignore them. Instead, they will continue to accumulate, making it even more challenging to catch up later.
  4. Risk of repossession and foreclosure: If you stop making payments on secured loans, such as your home or car, creditors might resort to repossession or foreclosure to recover their dues.

The 50/30/20 Rule and Debt Management

While the ‘Do Nothing Strategy’ may seem like an easy way out, it’s not the most effective approach to managing debt. A more practical strategy is the 50/30/20 rule, which prescribes a structure for how you should distribute your income.

The rule suggests that:

  • 50% of your income should be allocated to essential expenses (needs).
  • 30% can be spent on non-essential expenses (wants).
  • 20% should be dedicated to paying off debt.

Glossary of Key Terms Related to Debt

Understanding debt and financial management requires familiarizing yourself with some key terms. Here’s a quick rundown:

  1. Assets: These are valuable items that can be converted into cash, such as cash itself, property, or investments.
  2. Bankruptcy: This is a legal process that can help relieve you of your debt obligations. However, it can lower your credit score, making it challenging to secure a loan in the future.
  3. Credit counseling: Non-profit agencies offer education on budgeting and paying down debt.
  4. Credit score: A value between 300-900 that represents your creditworthiness. The higher the score, the more trustworthy you appear to lenders.
  5. Default: Failure to make loan payments for some time, which can reduce your credit score and lead to the seizure of property.
  6. Interest rate: The cost of borrowing money, expressed as a percentage of the loan that must be paid back in addition to the borrowed amount.
  7. Liability: The money you owe, such as a credit card balance.
  8. Mortgage: A home loan, considered ‘good debt’ because a home builds equity over time.
  9. Revolving debt: Credit that you can borrow repeatedly from a lender up to a certain limit, e.g., credit card debt.
  10. Secured debt: Debt that is secured against collateral, like your house or car.
  11. Unsecured debt: Debt that isn’t attached to property or an asset and is generally associated with high interest.


The ‘Do Nothing Strategy’ can be an enticing option for those struggling with debt, especially when they lack the means to pay it off. However, it’s not a viable long-term solution and often results in further financial strain. A more effective approach to managing debt involves budgeting and financial planning, such as adhering to the 50/30/20 rule. Understanding the implications of your choices is crucial to navigating your financial journey.

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