What would happen if the dollar collapsed?

The hyperinflation from a collapse of the dollar would intensify these effects. If the dollar collapses and runaway inflation results, it may get easier to pay off existing debt, but it's also going to be extremely difficult, and costly, to engage in any new borrowing. Inflation benefits borrowers at the expense of lenders.

Would a dollar collapse be a good thing?

American one dollar bill. A collapse of the dollar would not be a good thing for the U.S. economy, or the world's, but there might be a bit of a silver lining for people who owe money. Debt wouldn't be eliminated by a dollar collapse, but repaying it would get easier.

Would a dollar collapse eliminate debt?

Debt wouldn't be eliminated by a dollar collapse, but repaying it would get easier. That's because when a dollar loses nearly all its value, then $100 or $1,000 or $100,000 isn't worth much either.