Borrowing your way out of debt: Can I borrow like a country?

By Mr Bankruptcy

26th June 2025

In both personal finance and national economics, debt is a powerful tool – but also a potential trap. The idea of “borrowing your way out of debt” may sound contradictory but it’s something I hear from individuals, companies, and governments.

The sustainability and consequences of this approach, however, vary dramatically, depending on who’s doing the borrowing.

Personal Debt: A Delicate Balancing Act

For individuals, borrowing to manage existing debt can take several forms. Debt consolidation combines multiple debts into a single loan with a lower interest rate, simplifying finances. Refinancing can replace an old loan with a new one under better terms. Both can be good options.

Rolling over debt, ie continuously borrowing to pay off previous loans can, in some cases, ease a debt burden, and short-term liquidity might even help someone to stabilize their income or reduce expenses. However, this strategy is usually unsustainable without deeper changes. If spending habits remain unchanged, the debt cycle continues.

High interest borrowing, like using credit cards or payday loans, often makes a situation worse, and new loans can come with hidden fees or penalties. Ultimately, you can’t borrow your way out of debt if you don’t have a plan to fix the root problems: reduce spending, increase income, or both.

National Debt: playing by a different set of rules

When countries borrow, the dynamics are different. Most sovereign nations borrow by issuing government bonds – IOUs sold to investors with a promise to pay interest and repay the principal later. These bonds are bought by domestic institutions, foreign governments, and even central banks.

Unlike individuals, countries borrow in their own currency, which they can technically just print some more of. They usually don’t repay debt in full, they just keep rolling it over by issuing new bonds. If needs be, they can also generate more revenue by raising taxes. They can also borrow more to stimulate the economy, fund infrastructure, or manage crises.

Some similarities and differences between individuals and nations

Thankfully I haven’t come across a client with a national level of debt but there are a few similarities, as well as differences, between individual and sovereign debt.

Repayment. For individuals, debt must usually be repaid in full, either through regular agreed payments or, in some cases, through bankruptcy proceedings. However, I have been able to write off some debts for clients (see my case studies). In contrast, countries often roll over their debt, issuing new debt to pay off old debt rather than repaying it outright.

Defaulting. When a person defaults on debt, the consequences include bankruptcy, damaged credit scores, and legal action. For a country, default can lead to currency devaluation, inflation, economic contraction and loss of investor confidence, but not bankruptcy in the traditional sense.

The purpose of borrowing. Personal debt is usually taken on for consumption, covering living expenses, or investment in an asset, for example buying a home or paying for education. National debt, on the other hand, is often used to stimulate the economy, fund infrastructure projects, or respond to economic crises.

Limits on borrowing. An individual’s ability to borrow is constrained by their income, assets, and credit history. A country’s borrowing capacity, on the other hand, is determined by investor confidence in its economic strength and its track record for fiscal responsibility (ie paying back its loans).

The best approach to debt

For individuals and companies, the key to managing debt is discipline and planning:

But for governments, responsible borrowing means:

Both individuals and nations can use debt as a financial tool, but the rules of the game are different. In both cases borrowing can be a useful strategic tool when paired with responsibility and a clear plan for sustainability and repayment. However, if a debt becomes unmanageable, people’s livelihoods and wellbeing will be harmed.

Whether you manage a household budget, a company’s finances or a national exchequer, make sure that debt remains your servant, not your master.

Finding the right support

I can’t really help the US with its $30 trillion debt (though I’d start with some proper housekeeping); however I have helped many individuals and business owners find their way out from under an unmanageable debt burden. For most people, finding a trusted advisor is the first step on your journey to financial freedom.

At James Rosa Associates, we’ve helped countless clients to achieve financial freedom through our comprehensive and personalized approach.

We offer a full range of advice and professional services to individuals, business owners and directors faced by unmanageable debt and who want a solution. We also help anyone involved in a civil or commercial dispute. Our services include:

We are authorised and regulated by the Financial Conduct Authority (FRN665061) to work with clients to produce bespoke solutions to fit their specific circumstances.

Do you qualify for a free consultation?

We understand how unmanageable debt can affect lives and we want to help as many people as we can.

If you are ready to tackle your debt problem, or want to bring a dispute to a swift and cost-effective resolution, contact James Rosa Associates, ring 0845 6807217 or email enquiries@jamesrosa.co.uk and find out if you qualify for our free consultation service.

Debt problems put stress on relationships

By Mr Bankruptcy

2nd June 2025

A debt problem can seep into every aspect of life. It puts strain on relationships, affecting couples, families, friendships and business partnerships.

If you are taking action to find financial advice and deal with debt, it’s important not to neglect your relationships at the same time.

Social effects of debt

As a debt advisor, I’ve come to recognise many of the ways that a problem debt can harm a relationship; here are some of the most common that I see:

Relationship damage and debt

As well as a change in your behaviour, the psychological effects of debt come in many forms. Your family will be worried about you, but communication can become strained, making it more difficult to open up and be honest, even to someone close. This makes it harder for couples to discuss financial issues and work together to find a solution.

Changes in your behaviour or personality can also lead to partners drifting apart and loosening those bonds of trust you’ve built up over time.

Financial insecurity will affect family dynamics, making other members of the family more stressed, even children. They may not understand the financial implications of unmanageable debt, but they can sense the emotional effects on their parents, which potentially impacts on their own well-being and development.

Relationship support, hand-in-hand with financial advice

If you’re struggling with unmanageable debt, it’s essential to seek help from a debt advisor or financial counsellor. They can provide guidance on managing the problem, negotiating with creditors, and exploring debt solutions.

But there are resources available in the UK to help manage relationship pressures as well as financial ones. Seeking counselling or therapy together can help you and your partner to communicate more effectively and work through financial issues. Here are just some of the options available for a more holistic approach to your problems:

Getting professional debt advice can help you manage your debt and reduce financial stress. Websites such as Citizen’s Advice and the Government’s own website provide general advice, but everyone’s situation will be unique.

Include everyone in the conversation

Don’t forget that your financial problems affect more people than just yourself. Family assets including your car, even your home, may be at risk. So it’s important to include everyone affected by your debt in the conversation.

Isolation can be one of the worst effects of trying to deal with a debt. It’s a vicious cycle: trying to hide a problem or deal with it on your own can drive away the very people who can give you the emotional support you need.

But by seeking help and working together, you can address debt-related issues and protect the most valuable things you have – your relationships.

James Rosa Associates

It’s usually a good idea at some point to talk to a specialist debt advisor who can help you to explore your personal circumstances and identify your best options.

James Rosa associates is a firm of debt advisors and debt adjustors well known for our supportive, non-judgemental and friendly approach.

We offer a full range of advice and professional services to individuals, business owners and directors faced by unmanageable debt and who want a solution. We also help anyone involved in a civil or commercial dispute.

Our range of services include:

We are authorised and regulated by the Financial Conduct Authority (FRN665061) to work with clients to produce bespoke solutions to fit their specific circumstances.

Are you entitled to one of our free consultations?

We know how unmanageable debt can affect lives and we want to help as many people as we can. If you are ready to face your debt problem, or you want to bring a dispute to a swift and cost-effective resolution, then contact James Rosa Associates; you may qualify for our free consultation service.

Ring 0845 680 7217 or email enquiries@jamesrosa.co.uk today and take the first step towards a more positive future.

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