Lawyers say your $5,000 debt doesn't disappear when the company you owe goes out of business — here's why

Around 57% of households have some type of unsecured debt , including credit cards and personal loans. This debt can be a financial burden because borrowers must make monthly payments and cover interest.

Once you've taken on debt, you're committed to paying it back. Otherwise, you could hurt your credit score and face collection activity. But what happens if the company you borrowed from runs into financial trouble and goes out of business? Does that mean your debt disappears?

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Let's say, for example, that Ronald financed $10,000 in home repairs with a local construction company, but the company is now shutting its doors. Ronald still owes $5,000, so he's wondering if he still has to pay back this money or if the closure of the business he owes money to wipes his slate clean.

Unfortunately for Ronald, experts agree that he's likely not just going to be able to walk away from the debt, despite the company he owes money to shutting down.

While Ronald may have hoped he'd be off the hook once the construction company closed, that won't necessarily happen.